Pan Asia Bank leades the way: Colombo Stock Market re writes the history

                        DAILY MARKET REVIEW

03/06/2010 (S.L.S.Picks) – The both indices of the Sri Lanka stock Market were up for the third consecutive day today & now at its history best levels. Investors chased behind banking stocks expecting a reduction of effective tax on banks after the Government reduced taxes on following with immediate effect.

• Reduction of taxes on vehicle imports

• Reduction of taxes on imports of electrical goods & accessories

• Reduction of taxes on import of foreign currency notes to the country.

High net worth individuals, Institutional investors & Foreigners were buying in to selected valued stocks.

LOLC today purchased further 8.43 stake of Confifi group @Rs 210/share & Hotel Riverrina for Rs 110/share.

All share price index was up by 31.90 points to close at record 4332.29 & more liquid Millanka index was up by 68.70 points to close at 4918.64

Turnover for the day was healthy Rs 3.6b.n

Foreigners were net buyers for the  second consecutive day today where they purchased shares to the tune of Rs 513m.n. & sold shares to the tune of Rs 288m.n. reflecting a net foreign in flow of Rs 225m.n.

Footwear & Textile sector index rose by 7.91% & was the leading sector among all sectors due to the share price appreciation of Ceylon Leather Products s, followed by Trading sector. The leading negative performing sector was the Motors sector.

There were 86 gainers as against 62 negative performing counters.

CLOSER LOOK 

• Investors chased behind banking stocks for the second day,which the sector PER is at a discount to the market PER. Banking sector PER as at yesterday was 15.20 against market PER of 21.40. Banking sector is considered to be one of strong growth sectors for the future in post war Sri Lanka.

• Pan Asia Bank & Nations Trust Bank continued to attract investor attention. Both counters including the warrants of NTB traded in large quantities today. PABC tops both highest trades & highest volumes counters for the day.

• Stocks that will benefit directly from the re structuring of import taxes are as follows

                         * All the motor companies,Kelani tyres, Lanka Indian Oil Company, Chevron 
                        
                         * Singer Sri Lanka , Brown & Company, Abans

• Companies that will benefit indirectly from the reduction of import taxes on Motor vehicles & Electrical  items are

                          * All the Banks, Insurance Companies

• Foreigners were net buyers for the second consecutive day today.

STOCKS TO WATCH

• Lanka Ceramic

• Lanka Walltile

• Seylan Bank X

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