Central Finance races to league of Top 20 most valuable

■Share price hits all time high of Rs. 1,680; Market cap doubles between end December and yesterday
Persistent demand by investors either on speculation or fundamentals has propelled Central Finance Plc to grow further in the league of top 20 most valuable companies in the Colombo Bourse.

The company’s share price gained by nearly 5% or Rs. 71.50 to close at an all time high of Rs. 1,673.40. It hit an intra-day high of Rs. 1,680. The previous highest of Central Finance was Rs. 1,610. Last week it gained by only Rs. 22.70

At yesterday’s closing price, Central Finance’s market capitalisation was nearly Rs. 34 billion, and ranked number 18th in the top 20 league. It finished calendar year 2010 with a market capitalisation of Rs. 16.74 billion with its share price at Rs. 818.50 and yesterday’s market cap figure reflects a 103% increase. The company’s net asset per share was Rs. 435 as at December 2010 whilst at Group level it was Rs. 505.22.

Whilst CF is yet to announce FY 2011 full year results, in the first nine months Group revenue rose by 7% to Rs. 6 billion whilst net profit attributable to equity holders rose by 69% to Rs. 1.19 billion. Group post-tax profit rose 63% to Rs. 1.25 billion and pre-tax profit by 77% to Rs. 2.2 billion. The bottom line in the third quarter rose by 72% to Rs. 472 million whilst pre-tax profit grew by 98% to Rs. 895.6 million. Revenue growth in third quarter was near 10% to Rs. 2.09 billion.

Group assets as at 31 December, 2010 were Rs. 39.57 billion, up from Rs. 35.4 billion as at 31 March, 2010 and Rs. 35.2 billion as at 31 December, 2009. CF had revenue reserves worth Rs. 8 billion at Group level and Rs. 7 billion at company level as at 31 December, 2010.

Analysts pointed out that though results are impressive CF, controlled by Wijenaike family, remains an under performer given its strength and potential. However the share price soaring could be in anticipation of future upside as well as the fact that fixed assets of the company hadn’t been revalued for several years.

Bourse begins fresh week on weak note

The Colombo stock market began a fresh week on a weak note with both indices down though turnover remained healthy.

Benchmark ASPI was down by 40 points and Milanka by 26 points. Turnover amounted to Rs. 2.89 billion. Yesterday’s fall was the second consecutive day despite the SEC giving a boost by relaxing rules on clearance of outstanding client debt among brokers.

“The indices followed a downward trend throughout the day on the back of sustained selling pressure while trades on CLND (Colombo Land) amounted to 32% of the day’s turnover,” John Keells Stock Brokers said.

NDB Stockbrokers headlined its report “Week starts in a weak note” and said indices dropped, continuing the downward momentum from last week end. All sector indices declined except the Land & Property sector. Exceptional price gains of Colombo Land amidst heavy retail investor participation drove the Land & Property sector, following the large transaction recorded last Friday.

The Land & property sector was the main contributor to the market turnover, while the sector index increased by 6%.

The Bank, Finance & Insurance sector also contributed significantly to the market turnover (due to Commercial Bank and Nation Lanka Finance) with the sector index dropping 0.37%.

Despite the overall fall of the market select blue chips gained. JKH peaked to a high of Rs. 300 before closing at Rs. 298.40, up by 60 cents with slightly over 1 million shares traded. DIMO gained by Rs. 36 to Rs. 1,626.40, Ceylon Guardian up Rs. 2.30 and Finlays Capital by Rs. 12.50 to Rs. 265.50. HDFC also gained by Rs. 23 to Rs. 1,597.70 whilst Union Assurance rose by Rs. 3.20.

Foreigners were net sellers to the tune of Rs. 32 million.

Reuters reported that profit-taking in bank and telecom shares drove the stock market down on Monday for a second day, but speculative trade in Colombo Land and Development held back a bigger fall.

Traded volume was 89.9 million, against a five-day average of 118.1 million. The 30-day and 90-day average trading volumes were 66.7 million and 66.1 million respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with a 12.1 percent gain, after bringing in the region’s top return of 96 percent last year.

The rupee meanwhile closed weaker at unchanged at 109.88/90 a dollar from Friday’s 109.78/ as the Central Bank widened the dollar trading band by 10 cents to 109.50/90 from 109.50/80 amid heavy importer demand for greenbacks, dealers said.

source - www.ft.lk