Charumini DE SILVA
The changes of the market microstructure of the CSE including transaction costs will be active from August 1.
The crossing threshold will be increased from Rs 10 million to Rs 20 million. The tick size on transactions will be reduced to 10 cents across the board. The threshold for negotiable brokerage will be reduced from Rs 100 million to Rs 50 million. The minimum brokerage floor will be 0.20 percent.
The biggest beneficiaries of this reduction will be investors transacting less than Rs one million.
Speaking to the Daily News Business Capital Trust Securities, Director Sarath Rajapaksa said this initiative was long overdue.
The revised transaction costs will stimulate trading in the capital market.
The tick size on transactions being reduced to 10 cents across the board will encourage frequent trading. There will be more trading after August. This will also enable large increase in commissions and improve stockbroker’s income, he said. Lanka Securities Chief Operating Officer Kosala Gamage said this regulatory reform was very meaningful as the capital market is performing outstandingly and the country’s economy is stabilizing fast.
“The Government and the regulatory bodies should address to increase the liquidity levels of the market,” he said.
The trading will increase rapidly as frequent tradings will take place after the reforms in the CSE. The foreign investors are pleased with the political and economic stability where the foreign investor confidence has shown a positive trend in the trading.
This will increase the number of foreign and local investor participation in the CSE. These developments in the capital market will affect the country’s economy favourably, he said. Asha Philip Securities Ltd Director/CEO Dimuthu Abeysekera said the revised transaction costs will bring down the stockbroker’s revenue significantly. The stock broking companies started recovering themselves only after the restoration of peace. It would have been better if the regulators give more time to stabilize.
ASPI crosses 5,000 level
The All Share Price Index (ASPI) of the Colombo Stock Exchange (CSE) closed above the 5,000 level for the first time in history yesterday.
The ASPI closed the day at the 5,138.9 gaining 139.8 points (2.8 percent).
The Milanka Price Index (MPI) gained 159.5 points (2.8 percent) to close the day at 5.828.7 also recording the highest level in history. The total turnover recorded during the day was Rs 3.2 billion.
The market capitalization at the end of trading was Rs 1.68 trillion is the highest market capitalization recorded in the history of the CSE.
source - www.dailynews.lk
Thursday, July 29, 2010
Wednesday, July 28, 2010
DIST on Demand : Colombo Stocks Up by 2.8% for the day
28 /07/2010 (S.L.S.Picks) – Colombo Stock Exchange closed with record gains today up for the third consecutive day for this week. The All share price index was closed at 5138.93 level, up by massive 139.88 points. This is the first time in the history of Colombo Stock Exchange that the All share price index has passed the all important 5000 barrier level as at end of a trading day. The more liquid Millanka price index was up by substantial 159.54 for the day to close at 5828.63
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 & our expectation was the market to reach 5000 barrier level well before end of the year 2010. However ASI has achived its target well before the stipulated time frame.
Renewed buying interest was visible for selected stocks / Blue chip stocks as investors are expecting better results for the June quarter 2010 from these companies.
There were 114 positive contributors as against 47 negative contributors for the day.
Turnover for the day was a healthy Rs3.1b.n.
Foreign participation was at lower levels in today’s trading session. They were net sellers for the day by marginal Rs 18m.n. foreign purchases were at Rs 345m.n. & foreign sales were at Rs 363m.n
Renewed buying interest was visible in Hotels sector shares due to the increased tourist arrivals to the country & the Banking sector companies as well. Banking sector, Hotels sector & Construction sector has been identified as leading growth sectors in post war Sri lanka.
Palm Oil sector was heading the sector’s list due to share price appreciation of Bukit Darah Company, followed by Construction & Engineering sector. Stores & Supplies sector was heading the negative performers list for the day.
ANNOUNCEMENTS
- Trans Asia – Each Ordinary share to be subdivided in to two.
- Lanka Tiles - Capitalization of reserves of 01 ordinary share for every 04 shares held @ Rs 45 /share.
- Lanka Ventures – Final Dividend of Rs 1.50 / share.
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 time. The results released for JAN – MARCH 2010 quarter showed improved performances & earnings for this period has risen more than 150%. We expect better results from the listed companies for the JUNE 2010 quarter as well.
- Foreign participation was at high levels during the last three weeks & the Net foreign buying for the same period tops Rs 3.0b.n.This is a positive sign for the Colombo Market as investors are waiting to see continuous foreign buying in CSE.
- Buying for JKH the at improved price levels always gives the signal of an upward market potential. JKH was closed at Rs 249.50 today & the share was up by Rs 9.50 for the day. JKH share has continuous buying interest during the last two weeks onward at higher price levels.
- The credit guarantee scheme approved by the Central Bank of Sri lanka to strengthen the liquidity position of the registered finance companies may give the confident to investors to invest in the companies like The Finance Company, Nation Lanka Finance (Formerly Ceylinco Securities & Financials) etc. Investors are expecting a reduction of Vat from Banks in future as well, & there for we expect Banks to perform well in the medium to long term.
- Demand for hotel stocks were at high levels during today's trading sessions on back of improved Tourist arrivals to the country after the end of 30 year old civil war. Hotel stocks such as KHL, MARA,HSIG, HUNA, SIGV,TANG etc... were collected by the investors expecting further upward movement of these companies.
- We can expect DIALOG Telecom to perform well during medium to long term future on back of exceptional performance reported by the company. This is one of few companies in the market where foreigners can purchase in large quantities due to the high liquidity of its shares.
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)
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.
- Distilleries Company (DIST)
We have done a comparison chart for DIST against ASI ,MPI, the sector DIST is representing the BFT. This clearly shows us how DIST has under perform to the market & to the sector performance over the past 18 months period.
The cancellation of the ICSL deal may be the major reason for this performance & the profitability of the company also reduced by almost 50% to Rs 318m.n as at 31/03/2010 (Three months) which reflects an EPS of Rs 0.91for the period.
However we believe that the Govt bonds held with DIST (pending maturity) may give them the much needed boost for their bottom line.
DIST has interests to the Plantations through Balangoda & Madulsima Plantations, Telecom sector through Lanka bell , Beverage sector through its core business activities,Power sector through Newly established Hydro power plant at Madulsima ,Insurance sector through Continental Insurance. etc. They have interests in the area of tourism as well through its Associate company Aitken Spence PLC.
DIST has significant share holdings in the leading blue chip companies listed in CSE such as HNB ,COMB, JKH, DFCC Bank, ASIRI hospitals together with BBH,& LMF etc.
We expect DIST to perform well in the post war Sri Lanka in medium to long term.
- Sierra Cables (pending dividend of 0.20 cents)
- Environmental Resources Investment
- Colombo Land & Development Company
- Kotagala Plantation
- Dialog Telecom
- National Development Bank
- Overseas Reality
Under valued hotels in the market
Market Trend
data - www.cse.lk ,cdax
Sri Lanka Hemas June net up 61-pct
July 28, 2010 (LBO) - Earnings from power and pharmaceuticals helped Sri Lanka's Hemas Holdings to increase June 2010 quarter net profit by 61 percent to 291.5 million rupees from a year ago, a stock exchange filing said.
Sales rose 13.8 percent to 4.25 billion rupees during the period with other income and gains rising sharply by 267 percent to 50 million rupees.
"Revenue growth was driven by the pharmaceuticals business, hospitals and leisure, whilst growth in net earnings are largely attributable to power and pharmaceuticals, and the reduction of losses at hospitals," chief executive Husein Esufally said.
"The steady build up of our hospital business along with the anticipated performance in the hotel sector is expected to augment our already sound underlying businesses."
The group's fast moving consumer goods business sales grew by six percent during the quarter to 1.4 billion rupees but net profits fell five percent to 166 million rupees, mainly due to increased marketing investments.
"Despite the slow start, we anticipate a higher growth in sales volumes in the coming quarters," Esufally said.
"Our pharmaceuticals business showed good growth, with revenues increasing by 28 percent. The business successfully held its market leadership position with a 16.5 percent share."
The company is "aggressively pursuing" its strategy of expanding its presence in the over‐the‐counter (OTC) market with satisfactory results, Esufally said.
With steady build-up of patient flow, hospital revenues have increased by 55 percent in the June quarter from a year ago.
"We have also achieved the important milestone of making positive quarterly operating profits during the sixth quarter of operations since inception in end‐2008," Esufally said.
"Whilst patient satisfaction levels have seen a steady increase, we are also witnessing strong growth in important revenue generators such as laboratory, radiology, surgery and inpatient services."
Power sector profits have increased significantly, from eight million during the first quarter of last year to 60 million rupees for the quarter ended June 2010.
"Profit growth is partially attributable to the renewable energy segment, which almost doubled its profits from last year’s first quarter, and partially attributable to the absence of a significant overhaul in the thermal segment, which impacted last year’s profits," Esufally said.
Hemas group's two operational hydro power plants, which account for 4.6MW, performed well during the quarter.
It has started development of a 2.4MW hydro plant in Upper Magal Ganga which is expected to be complete during 2011.
Hemas group leisure sector revenues increased by 68 percent for the June quarter on the back of the tourism boom in post‐war Sri Lanka although its hotels remained in the red.
The 30-year island's ethnic war ended in May 2009 resulting in an immediate upturn in tourist arrivals.
Tourist arrivals have increased by 46 percent in the June 2010 quarter from a year ago and the hotel industry is enjoying increased room rates and occupancies, Esufally said.
"In view of the brighter industry prospects, we have embarked on an upgrading and repositioning plan for our existing resorts and a development plan to add new resorts to our portfolio."
The group is spending 500 million rupees to refurbish its Club Hotel Dolphin which is expected to be complete by September 2010 in time for the winter peak tourism season.
During the quarter, the group's Serendib Hotels sold part of its shareholding in Hotel Sigiriya to raise funds for some of its development plans.
source - www.lbo.lk
Visit - Hemas Holdings - A Truly Sri Lankan Company
Sales rose 13.8 percent to 4.25 billion rupees during the period with other income and gains rising sharply by 267 percent to 50 million rupees.
"Revenue growth was driven by the pharmaceuticals business, hospitals and leisure, whilst growth in net earnings are largely attributable to power and pharmaceuticals, and the reduction of losses at hospitals," chief executive Husein Esufally said.
"The steady build up of our hospital business along with the anticipated performance in the hotel sector is expected to augment our already sound underlying businesses."
The group's fast moving consumer goods business sales grew by six percent during the quarter to 1.4 billion rupees but net profits fell five percent to 166 million rupees, mainly due to increased marketing investments.
"Despite the slow start, we anticipate a higher growth in sales volumes in the coming quarters," Esufally said.
"Our pharmaceuticals business showed good growth, with revenues increasing by 28 percent. The business successfully held its market leadership position with a 16.5 percent share."
The company is "aggressively pursuing" its strategy of expanding its presence in the over‐the‐counter (OTC) market with satisfactory results, Esufally said.
With steady build-up of patient flow, hospital revenues have increased by 55 percent in the June quarter from a year ago.
"We have also achieved the important milestone of making positive quarterly operating profits during the sixth quarter of operations since inception in end‐2008," Esufally said.
"Whilst patient satisfaction levels have seen a steady increase, we are also witnessing strong growth in important revenue generators such as laboratory, radiology, surgery and inpatient services."
Power sector profits have increased significantly, from eight million during the first quarter of last year to 60 million rupees for the quarter ended June 2010.
"Profit growth is partially attributable to the renewable energy segment, which almost doubled its profits from last year’s first quarter, and partially attributable to the absence of a significant overhaul in the thermal segment, which impacted last year’s profits," Esufally said.
Hemas group's two operational hydro power plants, which account for 4.6MW, performed well during the quarter.
It has started development of a 2.4MW hydro plant in Upper Magal Ganga which is expected to be complete during 2011.
Hemas group leisure sector revenues increased by 68 percent for the June quarter on the back of the tourism boom in post‐war Sri Lanka although its hotels remained in the red.
The 30-year island's ethnic war ended in May 2009 resulting in an immediate upturn in tourist arrivals.
Tourist arrivals have increased by 46 percent in the June 2010 quarter from a year ago and the hotel industry is enjoying increased room rates and occupancies, Esufally said.
"In view of the brighter industry prospects, we have embarked on an upgrading and repositioning plan for our existing resorts and a development plan to add new resorts to our portfolio."
The group is spending 500 million rupees to refurbish its Club Hotel Dolphin which is expected to be complete by September 2010 in time for the winter peak tourism season.
During the quarter, the group's Serendib Hotels sold part of its shareholding in Hotel Sigiriya to raise funds for some of its development plans.
source - www.lbo.lk
Visit - Hemas Holdings - A Truly Sri Lankan Company
Proposed Restructuring of Dankotuwa Porcelain PLC
In the recent past shares of Dankotuwa has become very popular and also recorded remarkable appreciation of price. This is due to the fact the company has decided to accept by way of private placement capital infusion of Rs. 433 million from Environmental Resources PLC and Ceylon Leather Products PLC resulting in the additional issue of 42,163,000 shares at a price of Rs. 9.
The company lacked financial resources in the past for a turnaround and the proposed infusion of funds would be utilized for the following purposes.
(01)Modernisation of machinery including fuel efficient Kiln which is costly.
(02)Expansion of capacity.
(03)Retirement of some debts.
The Environmental Resources Investment PLC has competent staff and management skill in the rehabilitation of sick companies as evident from the success of Ceylon Leather Production PLC and naturally entry of ERI has been greeted with substantial increase of Dankotuwa share price.
Prior to the proposed entry of ERI the company entered into MOU with 2 major unions for wage freeze for 3 years which was a major obstacle in the turnround of the company. It should be recorded the government made a major contribution in this regard and should be commended.
The company has recorded appreciable net profits during 5 year period except for 2001 where the losses are insignificant as follows:
It is interesting to note the company has performed well without the benefit of GSP concession the proposed withdrawal which has been blown out of context by the opposition parties and few governments in the western world. The central bank has estimated the loss around US Dollars 100 which could be managed.
The Dankotuwa has the distinction in introducing an internationally accepted brand name with products of highest quality compared to best in the world. 80% of products which are exported to countries such as EU, USA, Japan, and India are available at prestigious department stores eg. Macy’s , BHs, ELCORTE Ingles, Iselan migres Jasanmal. There are only a handful of such products with Sri Lankan brand name internationally accepted.
Salient Factors of Restructuring
(01)With the replacement of some machinery which are over 25 years old, inefficient and costly to operate would be replaced. This Would reduce unit cost and increase production. It is relevant to mention Kiln purchased a few years back under a different management proved to be unsuitable and has been written off. This exercise contributed to a substantial loss of Rs. 400M recorded for financial year 2006. Interestingly company recorded a small profit in the following year 2007.
(02)ERI is bullish on the prospect of turnround of the company despite prospect of losing GSP concession. This is evident from the fact provision has been made for the expansion of the capacity with the infusion of capital. The proposed expansion would ensure higher turnover and increase competitiveness.
(03)The retirement of some debt with zero cost funds would reduce the finance cost.
(04)The MOU signed would ensure cost of wages at manageable level for next 3 years.
The writer is of the opinion based on prospects, due to entry of ERI price of Dankotuwa would justify a price range of Rs. 85 to 95 in the short term. The investors should remember the company ‘Implemented a drastic reduction of capital in the recent past where an investor who owned for instance 10,000/- shares now has only 5000/- shares. The investors should bear in mind offer price of Rs 9 is reasonable in relation to the book value of Rs. 10.50 as at 31, March 10. Investors should realize the present price of Dankotuwa is due to the proposed entry of ERI and would give substantial price benefit under ERI in the future. Investors would recall the writer predicted a price range of Rs. 150 to Rs, 175 for Ceylon Leather Products PLC when the price - traded at Rs. 54 in an article in English Newspapers on 30, January, 2009. There were sceptics as usual The price of CLPL ultimately rose to Rs. 268 far above writers estimate. Similarly investors and stock brokers should not be surprised if the price of Dankotuwa rise above Rs. 150 udder the management of ERI.
KAS Perera is a senior consultant in banking, finance, industrial projects, restructuring and investments. He is a retired Assistant General Manager of the Bank of Ceylon.
source - www.island.lk
Sri Lanka Tourism Another update - Sri Lanka's Teardrop Island is all about smiles
BY - PAUL BALDWIN - METRO WORLD NEWS
The so-called Teardrop Island of Sri Lanka has more reasons to shed tears than most.
A quarter century of civil war left countless dead and 300,000 displaced, then in 2004 a massive earthquake in the Indian Ocean sparked a tsunami which claimed 40,000 Sri Lankan lives and left another two million displaced.
But the war is over and the rebuilding has begun.
And the nation is fighting, and winning a new battle to bring back tourists in large numbers.
Sri Lanka of course has an ace card. It is staggeringly beautiful.
The New York Times has already named it the number one must-go destination of 2010 and it’s combination of lush, tropical fauna, fascinating history, and breath-taking beaches is very hard to beat. And arguably the best beach, and certainly the most famous, is Unawatuna.
Unawatuna is so pretty it’s almost a cliché.
Seemingly endless soft pink sands are gently lapped by perfect turquoise waters as the occasional sun-bather relaxes in a hammock slung between two palms.
Little bits of it can get busy, but for the most part Unawatuna, a good kilometre from the coast road, has a classic mellow traveller vibe and is populated by the young and the beautiful.
Since the 2004 tsunami the cafes have returned, most low-rise and in keeping with the hippy-ish feel, with the occasional eye-sore which leaves you wondering how planning permission was ever granted. But this aside, it’s easy to understand how Unawatuna repeatedly appears in lists of the world’s best beaches.
The beach bars offer food, usually fish and shellfish with a mountain of rice, at very reasonable prices, usually around $10 for lunch.
The calming peace that only a sun lounger and a airport novel can bring is really the main attraction at Unawatuna but for the easily distracted there is great diving.
source & photo credit - http://www.metronews.ca
Top 10 Tourism Stocks Ceylon Tourism Fund
Below mentioned are the list of hotels coming under the newly introduced Ceylon Tourism Fund.
01. John Keells Hotels PLC
02. Asian Hotels and Properties PLC
03. Aitken Spence Hotel Holdings PLC
Sri Lanka -owned
05. Taj Lanka Hotels PLC
06. Hotel Services (Ceylon) PLC
07. Royal Palm Beach Hotels PLC
08. Amaya Leisure PLC
09. The Lighthouse Hotel PLC
10. The Fortress Resorts PLC
01. John Keells Hotels PLC
- Cinnamon Lodge Habarana,
- Chaaya Village Habarana, Chaaya
- Citadel Kandy,
- Chaaya Blu Trincomalee,
- Coral Gardens
- Bentota Beach Hotels,
- Yala Village
- Cinnamon Island Alidhoo,
- Chaaya Reef Ellaidhoo
- Chaaya Island Dhonveli, C
- haaya Lagoon
02. Asian Hotels and Properties PLC
- Cinnamon Grand Colombo,
- Cinnamon Lakeside Colombo,
- Monarch Apartments,
- Crescat Apartments & Shopping Centre,
- Emperor Building
03. Aitken Spence Hotel Holdings PLC
Sri Lanka -owned
- Heritance Kandalama, Heritance Ahungalla
- Heritance Tea Factory,
- Earls Regency
- Ramada Resort,
- Neptune
- Hotel Hilltop,
- Browns Beach,
- Bandarawela Hotels
- Neptune Ayurweda,
- Heritance Madurai,
- Athithi
- Bearfoot at Havelock,
- Poovar Island Resort
- Tamara Resorts
- Prestige Ocean Villas,
- Prestige Water Villas
- Hudhuran Fushi,
- Meeddhupparu,
- Club Ranadhi
- Ayurvedha Village,
- Adaaran Prestige Vadoo
- Desert nights camp,
- Al Faraj Hotel,
- Ruwi Hotel
- Al Wadi Hotel,
- Sur Plaza Hotel
- Hotel Suisse, Kandy,
- Lihiniya Surf, Bentota
- Tissamaharama Resort,
- Queens Hotel, Kandy
- Hotel Seruwa, Polonnaruwa,
- Kitulgala Rest House
- Grand Ella Motel,
- Belihuloya Rest House
- Sigiriya Rest House,
- Polonnaruwa Rest House
- Hotel Mihintale,
- Bay Inn Weligama
- Hanwella Rest House,
- Ambepussa Rest House
- Medawachchiya Rest House,
- Dambulla Rest House
- Haarana Rest House,
- Pussellawa Rest House,
- Ambepussa Avanhala,
- Bentota Avanhala
05. Taj Lanka Hotels PLC
- Taj Samudra,
- Airport Garden Hotel,
- Taj Exotica
06. Hotel Services (Ceylon) PLC
- Ceylon Continental Hotel
07. Royal Palm Beach Hotels PLC
- Royal Palm Beach Hotel,
08. Amaya Leisure PLC
- Amaya Lake, Dambulla,
- Amaya Hills, Kandy,
- Amaya Reef, Hikkaduwa
09. The Lighthouse Hotel PLC
- The Lighthouse Hotel- Galle
10. The Fortress Resorts PLC
- The Fortress Resort – Koggala
Finance companies to be listed by next June
The Finance Houses Association Chairman is confident that all the finance companies will be listed in the Colombo Stock Exchange by next June, the deadline.
Out of the total number of 37 finance companies in Sri Lanka, three companies have complied with the Central Bank request to list in the Colombo Stock Exchange.
"We are confident that all the finance companies will list in the Colombo Stock Exchange. The rest of the finance companies are in the process and they are expected to list in the Colombo Stock Exchange by June, 2011," the Finance Houses Association of Sri Lanka, Chairman Hafeez Rajudin told the Daily News Business.
The fallen finance companies are recovering fast as the confidence level of the customers is improving with the positive economic conditions.
The Central Bank is further monitoring these finance companies and some are well monitored. These finance companies are paying back the money to customers on a batch-by-batch basis while considering the priority base of the customers.
"The asset level of the finance companies has increased in the last year. The customers of these institutes are vigilant on investing in finance companies," he said.
The Government's decision to reduce import duty on vehicles has also given a positive sign in the leasing and finance industry.
Finance companies will maximise benefits to customers by adding value to their products.
"We have to encourage customers and provide easy access to finances by adhering to time management systems and looking at new approaches such as micro-finance facilities," Rajudin said.
source - www.dailynews.lk
Another IPO - This time Ceylon Tourism Fund
Ceylon Asset Management, Deutsche Bank tie-up: Ceylon Tourism Fund unveiled
It is the first ever tourism sector fund, structured as an open-ended, equity fund that lets investors invest and exit at any time.
The Fund will distribute tax-free income from profits on an annual basis. It captures over 70 percent market capitalization of the hotel and tourism sector of the CSE, including both Colombo hotels as well as resorts a company, a media release said.
On July 28, 2010 the Units will be offered at the IPO price of Rs 10 with a minimum investment of Rs. 10,000. Deutsche Bank, is the Trustee and Custodian of the fund.
The Ceylon Tourism Fund is licensed by the Securities and Exchange Commission of Sri Lanka.
The Ceylon Tourism Fund invests in ten key companies in the hotels and travel sector. The companies are Aitken Spence Hotels, John Keells Hotels, Asian Hotel and Properties, Taj Lanka Hotels, Ceylon Hotels Corporation, Hotel Services (Ceylon), Royal Palm Beach Hotels, Amaya Leisure (former Connaisance), Light House Hotel (managed by Jetwing) and the Fortress Resort PLC.
The Top 10 tourism companies posses the management skills, service standards, marketing relationships and the capital to leverage profits and expand market share in the near term.
Ceylon Asset Management has a ten-year track record in index fund management to offer stock market returns without speculative or trading risks. CAM also manages two other funds namely the Ceylon Index Fund and the Ceylon Income Fund.
CAM is an associate company of Sri Lanka Insurance Corporation.
source - www.dailynews.lk
Tuesday, July 27, 2010
Colombo Stocks @ History best levels. Index hit 5000 barrier & JKH on continues demand
- Market hit 5000 index level during mid trading session.
- Foreigners continue were Net buyers to day. Net foreign inflow tops Rs 3.0b.n mark for the past 03 weeks.
- Dialog Telecom - Good candidate for foreigners.
- John Keels Holdings continue to perform well.
All share price index was up by 55.52 points to close at 4999.05 & more liquid Milanka price index was up by massive 73.29 points to close at 5669.19 points. This is the first time ever in the history of Colombo Stock Exchange that the All share price index has passed the all important 5000 barrier level. The All share price index crossed the 5000 mark during the mid day trading session today & ended just below the 5000 mark.
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 & our expectation was market to reach 5000 barrier level well before end of the year 2010 at that time & the ASI has met its target well before the stipulated time frame.
Renewed buying interest was witnessed in the Banking & Finance, Diversified Holdings, Hotels & Travels & Manufacturing sector Companies.
Turnover for the day was healthy Rs 2.3b.n
Foreign participation was at moderate levels. However foreigners were net buyers today by Rs 56m.n. Foreigners purchased Rs 335m.n. worth of shares & sold shares to the tune of Rs 279m.n.for the day.
IT sector was up by 2.47%, followed by the Plantations sector. Footwear & Textiles sector was heading the negative performers list at the end of today’s trading session.
There were 106 positive contributors as against 48 negative contributors 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 time. The results released for JAN – MARCH 2010 quarter showed improved performances & earnings for this period has risen more than 150%. We expect better results from the listed companies for the JUNE 2010 quarter as well.
- Foreign participation was at a high level during the last three weeks.The Net foreign buying for the last three weeks tops Rs 3.0b.n. Foreigners were net buyers during today's trading session as well.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 240.00. The share was up by Rs 5.50 for the day. JKH share has continuous buying during the last two weeks onward at higher price levels.
- Demand for hotel stocks were at high levels during today's trading sessions on back of improved Tourist arrivals to the country after the end of 30 year old civil war. Hotel stocks such as KHL, MARA,HSIG, HUNA SIGV etc... were collected by the investors expecting further upward movement of these companies.
- Investor interest was focused towards the country’s premier telecommunication operator Dialog Telecom PLC where 15.4m.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. The reported profit for the period was Rs 2.0b.n The share closed at Rs 10.50 up by 0.25 cents.
- Today;s crossings counter was full of Blue chip companies listed in CSE. A parcel of 1.0m.n shares of Dialog traded as a crossing today @ Rs 10.75
- We can expect DIALOG Telecom to perform well during medium to long term future on back of exceptional performance reported by the company. This is one of few companies in the market where foreigners can purchase in large quantities due to the high liquidity of its shares.
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)
- Environmental Resources Investment
- Colombo Land & Development Company
- Kotagala Plantation
- Dialog Telecom
- National Development Bank
- Overseas Reality
Under valued hotels in the market
Market Trend
data - www.cse.lk ,cdax
BoC to complete Shell due diligence this week
Sanjeevi JayasuriyaThe Bank of Ceylon will complete the due diligence process for the Shell Gas sell-out deal by the end of this week. The Bank is in the process of completing the work related to the due diligence and still no negotiations have commenced with Shell Gas, Bank of Ceylon Chairman Dr. Gamini Wickramasinghe told Daily News Business.
“The Government is ready for negotiations based on the due diligence outcome. It has shown keen interest to enter into LPG market in the country,” he said.
Meanwhile Shell Gas Finance Director and Country Controller Rimoe Saldin said negotiations will commence once the Government completes its due diligence process.
The discussion between the Government and Shell Gas is yet to take place, he said. Shell recently said it is discussing with third parties as part of a review of ownership options for most of the company’s liquefied petroleum gas (LPG) business.
The scope of the review is the Shell gas (LPG) businesses in France, Belgium, Netherlands, Luxembourg, Denmark, Finland, Sweden, Norway, Hungary, Poland, United Kingdom, Malaysia, Pakistan, Sri Lanka, Philippines, Singapore and Argentina.
Shell owns 51 percent share in Shell Gas Lanka while the Government owns the balance.
source - www.dailynews.lk
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