Monday, November 22, 2010

A pro-investor budget to rekindle indices – AsiaSecurities

Asia Securities last week said that a pro-investor Budget will certainly rekindle the indices on a more consistent basis.

The stock broker made this observation in its weekly stock market report.

“The bourse continued sliding down during the three-day trading week, despite seeing a marginal recovery during the last trading day in line with investors’ expectations on the budget,” Asia said.
It is guiding investors to continue to capitalize on attractively low priced counters which are fundamentally strong with sustainable growth potential.

“However, we expect the market to witness a transformation and sail smoothly driven by counters benefiting from the revisions made in the budget next week,” Asia said adding “We also believe that the activity levels in the market would revive back as IPO shares start trading.” The Colombo bourse currently trades at a 4 quarter trailing PE of 25.0X.

Along with Asia’s key buys its main stay recommendations remain; Diversified Hemas Holdings and Chemical Industries Colombo and despite the recent gains in hotel sector Asia is still see upside on Aitken Spence Hotel Holdings, Eden Hotels and Keells Hotels. It is also maintaining recommendations on the Banking sector stocks such as Sampath Bank and Nations Trust Bank.

“Due to expected increase in disposable income resulting a boost in consumption the Food and Beverage sector stocks such as Lion Breweries, Bairaha Farms and Distilleries remain attractive,” Asia said.

“Manufacturing stocks such as Lanka Wall Tiles and Tokyo cement are also amongst our favourites whilst Lanka Ashok Leyland has also been identified as a value stock. However, we are in the process of revisiting our models and recommendations we maintain our ‘BUY’ stand on,” Asia Securities said.

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