05/07/2010 (S.L.S.Picks) - Colombo Stock Exchange saw a decline on a start of a fresh week today due to continuous profit taking by the retail investors.
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 where earnings reported by the listed companies during the first quarter 2010 alone has risen 170% so far, will definitely help to bring down the market valuations to below 15 levels. This is a clear indication of the future growth potential available to the investors who have faith in investing at Colombo Stock Exchange Sri Lanka.
There are lot of undervalued companies & sectors in the market. & there are companies which have PE multiple well below 14- 12 levels. However we can expect a short term correction in the market since there are some companies trading at much higher prices now. Just to mention, a market correction at different intervals is expected in every stock exchange.
However we can expect future growth stocks to outperform the market in future. Shares in the caliber of NEST, LLUB, CFIN,WATA etc out performed the market in the past & we can expect new shares like KVAL,LFIN,KOTA,CERA,SIRA,BALA,BFL etc to out perform the market in future.
All share price index was down by 35.17 points to close at 4558.48 & the Milanka index was down by 70.53 points to close at 5140.28
Foreign participation was at low levels. Foreigners purchased shares worth of Rs 127m.n & sold shares worth of Rs 59m.n reflecting a net foreign in flow of Rs 68m.n. When the market is reporting losses, most of the time we can see a net Foreign inflow of funds, which is a noteworthy factor to mention.
Investor interest was focused towards the Sierra Cables today. The counter closed at Rs 3.90 /share up by Rs 0.30 for the day. It peaked Rs 4.20 during early hours of trading today. The company shares traded heavily & there were 31.1m.n shares changed hands today. It represent Top 10 gainers list, Top volumes traded list & the top trades list for the day.
There were some interest to the Plantation sector companies as well & the main focused was towards the Rubber plantation companies. The rising oil prices in the world market will directly benefit the Rubber plantation companies.
Motors sector was the highest gainer among all sectors today by registering a growth of 4.66% due to share price appreciation of Dimo Company, followed by the Plantation sector. IT sector was down by massive 7.96% was the leading negative growth sector.
Turnover reported for the day was healthy Rs 1.1b.n
There were 47 gainers as against 105 losers for the day.
ANNOUNCEMENTS
- CONVENIENCE FOODS LANKA PLC - Rs.2.25 per share - First & Final Dividend
- SELINSING PLC - Rs. 21.91 per share - First Interim Dividend
CLOSER LOOK
- There were some positive movements in the shares of Plantation companies today. Rubber Plantation Companies are expected to perform well in the medium to long run due to the ever increasing world oil prices & the Tea plantation Companies will also perform well in the future due to the higher tea prices.
- Foreigners were net buyers in today’s trading session by Rs 68m.n. This is a positive sign for the Colombo Market as investors are waiting to see continuous foreign buying in CSE.
- Most of future growth stocks have come to attractive price levels. Further downward trend in prices of these companies will be good for bargain hunters. We can expect the arrival of bargain hunters for some of Blue chip companies, as the trading prices of these were at attractive levels.
- The ODEL Initial Public Offering for 16,700,000 shares has been oversubscribed at an issue price of Rs. 15/= on the opening day itself.
STOCKS TO WATCH
- Sierra Cables
- Balangoda Plantations
- Colombo Land & Development
- Kotagala Plantation
- Overseas Reality
- Cargills(Ceylon)
- Dunamis Capital
data - www.cse.lk
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