26/07/2010 (S.L.S.Picks) - Colombo Stock Exchange reported record gains on a start of a fresh week today on back of retail, High net worth individual, Institutional investors buying in to selected stocks. Colombo Stock Exchange is now at record high levels & both indices are at its history best levels.
Colombo Stock Exchange is the best performing stock market in Asia so far for year 2010 with more than 35% return & is still attractive for medium to long term investors. Investors still can find a lot of undervalued fundamentally sound companies & sectors in the Stock Market. There are companies trading with low PE multiples.
All share price index was up by 48.02 points to close at record 4943.53 & the Milanka index was up by massive 50.77 points to close at 5595.90
We have clearly predicted the possible upturn in the market purely on the grounds of future growth potential of the shares listed in the Colombo Stock Exchange. We have published a special article “All Share Price Index - History performances & way forward “on 13th July, predicting the upward movement of the market. This has become a reality now & we expect market to reach 5000 barrier level well before end of the year 2010.
Foreign participation was at moderate levels. Foreigners purchased shares worth of Rs 212m.n & sold shares worth of Rs 528m.n reflecting a net foreign out flow of Rs 316m.n.
Investor interest was focused towards the country’s premier telecom operator Dialog Telecom PLC where 13.4m.n shares of DIAL traded hands. They have reported exceptional profits for the last six months ended 30/06/2010 from a loss position of Rs 9.5b.n reported in year 2009, converted to a profit of Rs 2.0b.n The share closed at Rs 10.50 up by 0.25 cents.
Plantations sector was the highest gainer among all sectors today by registering a growth of 3.22% due to share price appreciation of all most all the shares listed in CSE under the Plantation sector due to the improved prices fetched in the world market for Tea & Rubber,followed by the Services sector. IT sector was the leading negative performing sector in the market today.
Turnover reported for the day was healthy Rs 2.0b.n
There were 88 gainers as against 59 losers for the day.
CLOSER LOOK
- The quarterly results of the listed companies in the Colombo Stock Exchange for the MARCH – JUNE Quarter 2010 will be released to the market within couple of weeks ahead. The results released for JAN – MARCH 2010 quarter showed improved performances for the period. Earnings for this period has risen more than 150% & we expect better results from the listed companies for this quarter as well.
- Foreign participation was at a high level during last three weeks. The Net foreign buying for the last three weeks topped almost Rs3.0 b.n This is a positive sign for the Colombo Market as investors are waiting to see continuous foreign buying in to the Colombo stocks.
- Active Institutional participation was encouraging & they were buying in to strong future growth counters that helped to boost the market activities during past couple of days.
- Buying for JKH at improved price levels always gives the signal of an upward market potential. JKH was closed at Rs 234.75 The share was up by Rs 4.50 for the day.
- There were renewed buying interests for the companies in the Banking & Finance sector as well as Plantation sector. Sampath Bank,Ceylon Guardian ,Ceylon Investment & CIC shares both Voting & Nonvoting traded in large quantities & at improved price levels.Investors expect the Kegalle Plantations & Kotagala Plantations,Kahawatte Plantations,Elpitiya Plantations together with Balangoda Plantations to report above average profits for the June quarter.
- Cargills (Ceylon)Company will offer a good return to the investors who invest in the company at current market prices in the medium to long term period. The company share slipped only up to Rs 125(On large quantities) during the down turn period prevailed in the market two weeks back. The share closed at Rs 142.00 up by Rs 9.25 for the day. The share hit Rs 145.00 during the mid trading session today.
- DIAL has reported improved performance for six months period as at 30/06/2010 will be a booster for the overall market activities. The company has reported a loss of Rs 9.5b.n for the same period in year 2009.
- The improved prices fetched for the TEA & RUBBER in the world market may help to deliver above average results for the Plantation companies for the half year 2010.
STOCKS TO WATCH
- Sampath Bank
Has reported exceptional performance for the 1Q 2010 ended 31/03/2010 by registering a profit of Rs 598m.n as against 397m.n reported for the same period in year 2009.This reflects a profit growth of 50.6% YOY. Earnings per share (EPS) for the period was Rs 7.09 as at 311/03/2010 & it was Rs 5.24 for the same period in year 2009.NAV of Sampath share as at 31/03/2010 was Rs 174.33. Sampath trailing PE ratio is below 12 & is one of lowest among listed banks.
Sampath Bank has a pending subdivision of 2 shares for every single shares held.
- Hotel Marawila
MARA is the only hotel listed in the Colombo Stock Exchange that trades below Rs 20 levels as at end of today's trading session.( A 10 Rupee company) The REEF is originally reported as a One rupee company.
MARA has reported improved profits as at 31/03/2010 & the reported profit was Rs 22.0m.n, against Rs 13m.n reported for the same period in year 2009. NAV per share stands at Rs 3.98 as at 31/03/2010.
MARA is a Lankem Ceylon PLC owned company.
We expect MARA to deliver over 80% return for the investors who invest in the company shares at current price level ( Rs 12.75) over medium to long term period purely on back of increased tourist arrivals to the country.
- Sierra Cables (pending dividend of 0.20 cents)
- Balangoda Plantations
- Colombo Land & Development
- Kotagala Plantation
- Cargills(Ceylon)
- National Development Bank
- Overseas Reality
Market Trend
data - www.cse.lk ,cdax
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