BOOK REVIEW: PROFITABLE INVESTING IN SHARES MADE EASY
Author/Publisher: C.A. Sarathchandra
Price Rs: 500/-
by Dr. Tilak S. Fernando reporting from Colombo
Investing in share market is a complex and complicated task for the amateur or average investor. To find a textbook for self-study of the subject with source material for investment in shares is even harder to find. In this context C.A.Sarathchandra, a banker with long years of experience in Commercial, Development and Investment Banking at Senior Management level, has been successful in bringing out a book titled, " Profitable Investing in Shares made Easy,' analysing both the conceptual as well as the practical aspects of share trading and incorporating ethical and operational considerations which would help develop a better understanding of the concept of and practices of the share market as relevant to economic development in Sri Lanka. His other publications include " Viyaparika Obata Benku Naya ( Bank Loans for entrepreneurs), Concepts of Marketing and Finance facilities for Tea Industry.
"Profitable Investing in Shares made Easy" is the author's latest publication covering all aspects and operations of the Colombo Stock Exchange (CSE) for the benefit of a wider section of investors with varying academic and financial backgrounds - even including ordinary housewives.
The book running into 136 pages concentrating on seventeen chapters on vital topics such as, " What is investment, Real Assets, Financial Assets, Securities, Investment and Savings, Speculation, Capital Gain, Gambling, Return and Risk", will educate the amateur and the ordinary enthusiastic investor in the Colombo Stock Exchange. Even the Corporate Investor who considers the Colombo Stock Exchange as an alternate source for any surplus funds in investment will find the book as an important gem.
The cleverness of the author is displayed by his being able to clarify what is normally regarded as high-flown financial and commercial jargon in simple language, which is easy to comprehend by the non-professional potential investor. The book deals comprehensively with various forms of ordinary shares (equities) and a range of risks associated with the share market.
What is the difference between investment and gambling? The author explains very clearly that an investment should be an attempt to plan carefully, evaluate and allocate funds in various investible items which offer safety of principal, and moderate and continuous return with long term commitment whereas in gambling, it is quite the opposite which connotes high risk with expectation of high returns. Gambling, he points out is based on tips, rumours, hunches and, unplanned operation, being ignorant of the exact nature of risk, which is non scientific.
Chapter three discusses in detail, ' income, capital growth, wealth, safety of capital, liquidity, hedge against inflation, tax relief, collateral and inflation. The author stresses the fact that the money intended to be invested in shares should be confined to residual income only after leaving allowances for investor's regular financial commitments. He advises that the prime aim of an investor should be to maximise the size of the investor's total wealth.
Explanation on the Colombo Stock Exchange gives a graphic account of all aspects of Securities and Exchange Commission in Sri Lanka, Listing Requirements, Issued Capital, Foreign Investment in Shares, Repatriation of sale proceeds, Regional Funds and Country Funds.
Discussing the ' Trading System', the author points out how to choose a broker and throws light on the Central Depository System (CDS), Trading Day, Settlement Cycle, Price Earning Ratio, The desired time to Buy and Sell shares, Primary and Secondary Markets, Bid and Offer prices and Public Issues.
The author devotes a full chapter in discussing Ordinary and Preferential Shares, Pre-emptive right, Capital gain, Voting, Dividends and Advantages and Disadvantages of Equity. He also analyses all Systematic risks involved in Interest, Inflation, Currency and in the Political sphere and the unsystematic risks involved in Liquidity and Operational performance of the company. The author goes further into the areas of Investment Analysis, Company Analysis, Investment Information, Share Price Indices, Share Issue, Share Holders' Rights, Borrowing for Investment in Shares, Portfolio Management and How the Private Investor can profit from share trading.
Embarking on a banking career at the Peoples' Bank, as a Junior Officer, Sarathchandra climbed the promotional ladder fast to become the Executive Director in charge of Finance and Management Information at the Bank. Subsequently, his UK professional qualifications helped him to join the Merchant Bank of Ceylon where he served in the capacity of Manager, Consultant and Assistant Director. He later moved to Seylan Merchant Bank as the Chief Executive and Executive Director (Finance) and became extensively involved in the capital market operation.
With a unique combination of professional qualifications in Banking, Accounting, Management, Marketing and Economic Development, Mr. C.A. Sarathchandra presently works as the Chief Executive Officer of the HDFC Bank. He was responsible for the successful transformation of the Old Housing Development Finance Corporation into a Licensed Specialised Bank in 2003. Under his Management HDFC Bank won the National Business Excellence Award presented by the Sri Lanka National Chamber of Commerce, in the financial services sector, on two consecutive years in 2004 and 2005. Mr. Sarathchandra was appointed for a specific term by the World Bank as a Consultant for the Housing Finance Industry in South Asia under which he successfully established a Housing Bank in Maldives recently.
Profitable Investment in Shares Made Easy is a comprehensive 'bible' or a guide book of immense importance to all potential investors as much as for the professionals in the finance and investment field. The book can be obtained from the author, who is the publisher, by writing or e-mailing to the following address: 23/37, Diyawanna Gardens, Pagoda Road, Nugegoda - e-mail. firstname.lastname@example.org- Tel: 2424863 or from Lake House Book shops and Sarasavi Book shops.