The loss of momentum yesterday despite the early boost following the SEC’s easing of credit rules saw some market circles privately talking of theories of sabotage and sceptics being at work.
This couldn’t be verified independently, but at least one broker alluded to scepticism in its market report. DNH Financial in its commentary said it was “time to shed the scepticism”.
It said that while the number of sceptical market participants sitting on the sidelines appeared to be relatively large, given the presumption that the bourse simply has to retreat before it can move upwards, a key argument underlying its overweight recommendation on the bourse was that market fundamentals had improved significantly with valuations for several stocks trading at highly attractive multiples.
“Many of the stocks we recommend are in the industrials, banking, diversified and tourism sectors. While these companies possess significant long-term fundamentals and produce substantial cash flow, several of them have suffered price declines over the last few months producing highly attractive buying opportunities trading at less than 10X multiples,” DNH added.