Broader market index returned 14%, Top Large Caps over 100%, ditto for consumer brands like Bata, Marico, Reckitt Benckiser, Glaxo, Mobil and few more.
Market Cap to GDP ratio is still favorable at 24%
Despite the stellar returns this year, one can expect decent returns in equities in Bangladesh ~ 20% in local currency, relatively speaking. Top consumer brands offer 30% – 50% ROE with great cash flow, statistically cheap multiples.
Low crude will keep the BDT/USD currency equation stable (biggest elephant in emerging market investing). Large immigrant population and remittance, an added bonus.
Market is gradually becoming a diverse one with 547 listed companies — 17 new IPO in 2014, likely to attract foreign investment.
Banking could rebound this year, biggest weight which did not perform in 2014,
Biggest five large caps did not fail to compound
IPOs not for investors (only traders)
Dhaka stock exchange also introduced new trading software on exchange on 11th of December 2014 in collaboration with NASDAQ OMX, introduced T+2 ( instead of T+3) reducing the cycle.
Corporate profitability to increase in 2015 on back of low inflation, increase Govt. employee salaries, low oil input price. The country is a fertile ground for multibagger opportunities.
Disclosure: Invested in stocks discussed. Views are personal notions and do not represent any organisation or company. I am not an investment adviser. Investment in stock market can (and many a times do) result in loss of principal capital.
SOURCE: Long Term Equities – Read entire story here.