The recent favourable judgment on Touchwood Investments PLC (Touchwood) by the Court of Appeal will see its share being traded by retailers, according to analysts.
Touchwood issued a statement to the Colombo Stock Exchange (CSE) saying that the Court of Appeal on January 26 quashed the decision of the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) who ruled against the forestry investment firm’s accounts, where it faulted both the company and its auditors for making 'unreliable' claims.
Arjuna Dassanayake, Vice President Acuitystockbrokers said that this share did go up to Rs 150 on low liquidity and high speculation in 2008, but the market was quite volatile at that time. “Now with stability in the market and favourable court decisions the high risk speculators can once again thrive on this share,” he said.
Touchwood has used an International Accounting Standard (IAS 41) on agriculture and brought tree growth numbers to its books using a fair market value principle. In 2007 February, SLAASMB told CSE that the valuations are not in accordance with the standard, and some young plants were valued at ten times the replacement cost. Some eight months later, in October, Lanka Orix Leasing Company gained control Touchwood.
Some say that Touchwood is ‘grossly’ undervalued. Sarath Rajapakse, Director Capital Trust noted that Touchwood has biological assets (mahogany trees). “These trees will grow come recession or not and they are getting closer to maturity,” he said. He said the net asset value of this share is slated to rise to Rs 200 levels this year.
source - www.sundaytimes.lk
2 comments:
Technical Analytical Forecast:
All Time Records Are Pushed Further Up In The Post Election Euphoria Triggering a Round of Profit Taking!!!
ASI and MPI reached record high levels of 3735 and 4311 intraday and ended at an all time record close of 3709 and 4265 (ASI & MPI) on Tuesday but the market consolidated on Wednesday since the indices that overshot the upper Bollinger Band had to reenter the Bollinger Envelope and ease the overbought condition. MACD BUY on ASI as well as MPI appeared to complement the Parabolic SAR BUY already in place as the market registered significant gains on Tuesday. The market recovery towards the latter part of the trading day on Wednesday indicates that the consolidation will be short-lived and the up move will soon resume. With RSI’s in mid 70’s there could be a significant rise in indices during the coming week with indices pushing deeper into record high territory. Turnovers well in excess of a Billion Rupees were recorded each day during the first three days of the week and the trend may continue in the weeks to come.
Monday’s & Tuesday’s market activity was again dominated by ‘stocks with stories’ such as GREG, CLPL, SEYB, SEMB, BRWN, RICH, LCEM, etc. TWOD sluggishness continued on Wednesday due the delay in filing the full judgment of the Appeal Court. Though the Accounting Standards Board could request for leave to appeal to the Supreme Court within 42 days from the date the judgment is delivered they are unlikely to do so since there aren’t sufficient grounds for such an appeal. We understand that the full judgment will be filed at the CSE on Friday. TWOD with a net asset value per share (NAVPS) of Rs.182 as at March 2009 provides an excellent opportunity for an arbitrage profit. It is also a good candidate for a hostile takeover.
4100 on the ASI and 5700 on the MPI are the levels to watch. Smooth and a quick rise above these levels would pave the way for big and rapid gains defining the new market trend for the ‘Suba Anagathayak’ era.
- Sarath Rajapakse / Capital Trust Securities
Hi Friend,
We also believe that our market has further room to go up on back of improved company results. See our report http://srilankastockpicks.blogspot.com/2010/02/sri-lanka-several-companies-reported.html
As a matter of policy we do not publish technical articles,since we are targeting small time investors/ local & foreign individuals/ etc... For this we are developing a separate web site SRI LANKA HOT STOCKS which is still under construction.
Anyway we appreciate your views.Even though we see a net foreign out flow so far for this year ,in the medium to longer run our market is still offers attractive returns.
Why are we think that foreigners are always right. Can it be?
We have to change our mentality. Many of our investors are waiting for selling shares instead of buying. At every price declines investors should pick fundamentally sound/ low value / quality shares.
For example see below the main strategies we adopted to won the 30 year old civil war in our country.
01.LTTE has no genuine idea for a political solution.
02.LTTE should be defeated military.
03.LTTE can be defeated military.
Like wise why our investors can't identify the value of our stock market/ opportunities available for us?.
We believe that the COLOMBO STOCK EXCHANGE is the main investment opportunity we have at the moment in Sri lanka after the end of 30 year old civil war.
Thanks.
Hence grab
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