Despite fears that foreign investors may continue to exit emerging markets off in response to the cut back in the US fed’s bond buying program, DNH Financial believes that foreign allocations to domestic equities could remain (notwithstanding the possibility of a temporary sell-off), with robust domestic economic and corporate EPS growth providing the necessary tailwind.
It said descending close to the 6,200 support level, it is easy to shy away from the market on the conviction that it may lose further ground due to the perceived lack of any relevant support despite expectation of robust 2Q2013 corporate results for blue-chip counters.
“While we don’t rule out the possibility of further sideways movement in the short term, we are nevertheless reasonably convinced that the market should garner firm interest from foreign investors who may adopt a cherry-picking approach focusing on counters that present strong and sustainable value in high growth and defensive sectors,” DNH said.
“This should provide the necessary foundation for the market’s systematic rise over the medium to longer term. In this respect, we advise investors to focus on companies with largely monopolistic attributes and strong brand loyalty within sectors and sub-sectors that are both growth and resilient.
We reiterate the need to construct a diversified portfolio of stocks that have strong top line revenue growth and low debt to equity ratios,” DNH Financial added.
source - www.ft.lk
Monday, June 24, 2013
1Q GDP growth slows but still amongst world’s highest
Sri Lanka’s first quarter GDP growth slowed to 6% but still remains amongst the highest in the world, according to stock broking firm DNH Financial.
It said Sri Lanka reported 1Q2013 GDP growth rate of 6.0% in line with its expectations. Growth was spearheaded by the industrial, services and agriculture sectors which rose by 10.7%, 4.3% and 2.0% compared to 10.8%, 5.8% and 12.0% reported during 1Q2012.
“We view this performance as satisfactory and indicative of the country’s resilience in an environment of globally heightened risk, while also setting the foundation for our expectation of 6.5% to 7.0% GDP growth rate for FY2013.
With the exception of China, which has reported a GDP growth rate of 7.7% in 1Q2013, it is encouraging to note that Sri Lanka has outperformed all BRICS countries in terms of 1Q2013 GDP performance during the period,” DNH Financial said.
source - www.ft.lk
Tuesday, June 18, 2013
Sri Lanka stocks close down 0.4-pct
June 18, 2013 (LBO) - Sri Lanka's stocks closed down at 0.42 percent on Tuesday, continuing its downward trend with investors taking profits and index heavy stocks continuing to drop, brokers said.
The benchmark Colombo All Share Index closed 26.11 points lower at 6,193.00 and the S&P SL 20 Index closed 0.33 points higher at 3,497.12 up 0.01 percent.
Turnover was 291 million rupees down from 310 million a day earlier.
Foreigners brought 92 million rupees worth shares while selling 59 million rupees of shares, in a day that 48stocks advanced and 153 stocks declined.
Ceylon Tobacco Company contributed most to the index closing at 1002.20 rupees up 12.20 rupees helped by a crossing of 25,000 shares at 1000 rupees per share.
Commercial Leasing & Finance closed at 4.30 rupees up 20 cents and Ceylinco Insurance gained 56.90 rupees to close at 1016.90 rupees.
Negative contributors included N D B Capital Holding's losing 45.00 rupees to close at 450.00 rupees, The Lions Brewery closed at 400.00 rupees down by 10 cents and Sri Lanka Telecom lost 50 cents to close at 41.40 rupees.
Pan Asia closed at 19.60 rupees down 30 cents. Union Bank of Colombo closed at 18.30 rupees down 10 cents and Sampath Bank closed at 211.40 rupees up 40 cents. Commercial Bank of Ceylon gained 10 cents to close at 116.50 rupees
.
Nestle Lanka gained 2.20 rupees to close at 1930.80 rupees and John Keells Holdings lost 20 cents to close at 264.00 rupees.
Dialog Axiata closed at 8.70 rupees down 10 cents, Chevron Lubricants Lanka gained 3.20 rupees to close at 288.20 rupees and Distilleries Company closed at 192.00 rupees down 1.00 rupee.
source - www.lbo.lk
The benchmark Colombo All Share Index closed 26.11 points lower at 6,193.00 and the S&P SL 20 Index closed 0.33 points higher at 3,497.12 up 0.01 percent.
Turnover was 291 million rupees down from 310 million a day earlier.
Foreigners brought 92 million rupees worth shares while selling 59 million rupees of shares, in a day that 48stocks advanced and 153 stocks declined.
Ceylon Tobacco Company contributed most to the index closing at 1002.20 rupees up 12.20 rupees helped by a crossing of 25,000 shares at 1000 rupees per share.
Commercial Leasing & Finance closed at 4.30 rupees up 20 cents and Ceylinco Insurance gained 56.90 rupees to close at 1016.90 rupees.
Negative contributors included N D B Capital Holding's losing 45.00 rupees to close at 450.00 rupees, The Lions Brewery closed at 400.00 rupees down by 10 cents and Sri Lanka Telecom lost 50 cents to close at 41.40 rupees.
Pan Asia closed at 19.60 rupees down 30 cents. Union Bank of Colombo closed at 18.30 rupees down 10 cents and Sampath Bank closed at 211.40 rupees up 40 cents. Commercial Bank of Ceylon gained 10 cents to close at 116.50 rupees
.
Nestle Lanka gained 2.20 rupees to close at 1930.80 rupees and John Keells Holdings lost 20 cents to close at 264.00 rupees.
Dialog Axiata closed at 8.70 rupees down 10 cents, Chevron Lubricants Lanka gained 3.20 rupees to close at 288.20 rupees and Distilleries Company closed at 192.00 rupees down 1.00 rupee.
source - www.lbo.lk
Monday, June 17, 2013
Sri Lanka stocks close flat
June 17, 2013 (LBO) - Sri Lanka's stocks closed flat Monday, due to index heavy stocks continuing to drop and profit taking by some investors, brokers said.
The benchmark Colombo All Share Index closed 0.28 points lower at 6,219.11 and the S&P SL 20 Index closed 7.56 points lower at 3,496.79 lower at 0.22 percent.
Turnover was 310 million rupees down from 577 million on last week Friday.
Foreigners brought 146 million rupees worth shares while selling 55 million rupees of shares, in a day that 77stocks advanced and 104 stocks declined.
Ceylon Tobacco Company contributed most to the index closing at 990.00 rupees up 10,20 rupees helped by a crossing of 25,000 shares at 1000 rupees.
The Lion Brewery Ceylon closed at 399.90 rupees up 12.50 rupee and Carsons Cumberbatch gained 6.00 rupees to close at 444.00 rupees.
Negative contributors included John Keells Holdings which lost 1.40 rupees to close at 264.20 rupees, Chevron Lubricants Lanka lost 8.20 rupees to close at 285.00 rupees and Distilleries Company gained 60 cents to close at 195.00 rupees.
Distilleries Company closed at 193.00 down 2.00 rupees with a crossing of 200,000 shares at 195 rupees.
Pan Asia closed at 19.90 rupees down 30 cents. Union Bank of Colombo closed at 18.20 rupees down 70 cents and Sampath Bank closed at 211.80 rupees up 60 cents. Commercial Bank of Ceylon lost 0.30 rupees to close at 116.40 rupees.
Nestle Lanka gained 8.40 rupees to close at 1928.60 rupees and Dialog Axiata closed flat at 8.80 rupees.
source - www.lbo.lk
The benchmark Colombo All Share Index closed 0.28 points lower at 6,219.11 and the S&P SL 20 Index closed 7.56 points lower at 3,496.79 lower at 0.22 percent.
Turnover was 310 million rupees down from 577 million on last week Friday.
Foreigners brought 146 million rupees worth shares while selling 55 million rupees of shares, in a day that 77stocks advanced and 104 stocks declined.
Ceylon Tobacco Company contributed most to the index closing at 990.00 rupees up 10,20 rupees helped by a crossing of 25,000 shares at 1000 rupees.
The Lion Brewery Ceylon closed at 399.90 rupees up 12.50 rupee and Carsons Cumberbatch gained 6.00 rupees to close at 444.00 rupees.
Negative contributors included John Keells Holdings which lost 1.40 rupees to close at 264.20 rupees, Chevron Lubricants Lanka lost 8.20 rupees to close at 285.00 rupees and Distilleries Company gained 60 cents to close at 195.00 rupees.
Distilleries Company closed at 193.00 down 2.00 rupees with a crossing of 200,000 shares at 195 rupees.
Pan Asia closed at 19.90 rupees down 30 cents. Union Bank of Colombo closed at 18.20 rupees down 70 cents and Sampath Bank closed at 211.80 rupees up 60 cents. Commercial Bank of Ceylon lost 0.30 rupees to close at 116.40 rupees.
Nestle Lanka gained 8.40 rupees to close at 1928.60 rupees and Dialog Axiata closed flat at 8.80 rupees.
source - www.lbo.lk
ASPI tracks MSCI Emerging Market performance
Contrary to popular rhetoric, foreign investor sentiment appears to have a not inconsiderable impact on the ASPI’s performance, as can be seen in the chart in which the MSCI Emerging Markets Index has been juxtaposed against the ASPI.
DNH Financial said with foreign participation accounting for approximately 30-50% of daily market turnover, it is not surprising thawt a strong correlation exists between emerging market performance and the ASPI’s trajectory on an YTD basis. Notwithstanding this however, given the robustness of the domestic economy and its impact on corporate EPS growth, it is believed that the Colombo Bourse will be spared much of the contagion that may continue to sweep through major markets in Europe and in other areas as a result of the Eurozone debt crises.
Commenting on the market’s trajectory, DNH said that with robust EPS growth expected in selected counters, it recommends investors to focus on companies that are liquid, cash generative, have a dominant market position and are intrinsically sound while advising against taking speculative positions in stocks.
“We reiterate a focus on companies with sustainably high ROCEs and defendable competitive advantages, resulting in above average earnings growth potential that is still not fully factored into share prices,” it said. “In terms of market trajectory, we expect the Bourse to re-test the 6,500 key resistance level over the coming weeks, although intermittent bouts of profit taking could result in temporary dislocations,” DNH added.
Heading into the last few weeks of 2Q2013, DNH also expects a number of themes to emerge which are likely to shape the market trajectory; volatility in the global markets as they continue to capitulate to US and Eurozone debt tensions which could encourage foreign fund managers to increase their allocations to emerging/frontier markets such as Sri Lanka (even though foreign participation in the local bourse could peter out slightly in the short term if the sell-off in global equities continue), the likelihood of an improvement in 2Q2013 corporate EPS growth for listed blue chips which should in turn result in a decline in the PE and PEG valuations in turn providing a trigger for medium term to longer term buying interest.
The convergence of these factors is likely to provide the perfect backdrop for the Sri Lankan Bourse to commence its re-rating, despite the fact that there could be sporadic bumps along the way.
source - www.ft.lk
DNH Financial said with foreign participation accounting for approximately 30-50% of daily market turnover, it is not surprising thawt a strong correlation exists between emerging market performance and the ASPI’s trajectory on an YTD basis. Notwithstanding this however, given the robustness of the domestic economy and its impact on corporate EPS growth, it is believed that the Colombo Bourse will be spared much of the contagion that may continue to sweep through major markets in Europe and in other areas as a result of the Eurozone debt crises.
Commenting on the market’s trajectory, DNH said that with robust EPS growth expected in selected counters, it recommends investors to focus on companies that are liquid, cash generative, have a dominant market position and are intrinsically sound while advising against taking speculative positions in stocks.
“We reiterate a focus on companies with sustainably high ROCEs and defendable competitive advantages, resulting in above average earnings growth potential that is still not fully factored into share prices,” it said. “In terms of market trajectory, we expect the Bourse to re-test the 6,500 key resistance level over the coming weeks, although intermittent bouts of profit taking could result in temporary dislocations,” DNH added.
Heading into the last few weeks of 2Q2013, DNH also expects a number of themes to emerge which are likely to shape the market trajectory; volatility in the global markets as they continue to capitulate to US and Eurozone debt tensions which could encourage foreign fund managers to increase their allocations to emerging/frontier markets such as Sri Lanka (even though foreign participation in the local bourse could peter out slightly in the short term if the sell-off in global equities continue), the likelihood of an improvement in 2Q2013 corporate EPS growth for listed blue chips which should in turn result in a decline in the PE and PEG valuations in turn providing a trigger for medium term to longer term buying interest.
The convergence of these factors is likely to provide the perfect backdrop for the Sri Lankan Bourse to commence its re-rating, despite the fact that there could be sporadic bumps along the way.
source - www.ft.lk
Sunday, June 16, 2013
Orient Finance PLC net profit up by 23% for the year
Dr. D. C. Jayasuriya PC – Chairman, Orient Finance PLC
According to the un-audited Interim Financial Statement for the Financial Year ended 31st March 2013 released to the Colombo Stock Exchange, Orient Finance PLC has recorded a 23% increase in Net Profit after Tax over the previous year to Rs. 168.4 Mn. This is the highest ever profit made by the Company in its decade of operations.
Income for the year recorded a growth of 70%, registering Rs. 825 million as against the Rs. 529 million income recorded in the previous year.
The Company’s Earnings Per Share (EPS) improved to Rs. 1.46 for the year from Rs.1.30 recorded in the previous year which is a 23% increase.
By the end of the financial year, the Company’s net lending portfolio increased to Rs.3.3 Bn from Rs. 2.2 Bn as at 31st March 2012 recording a 49% growth despite the decrease in the overall demand for motor vehicles.
During the year, five window offices located at Anuradhapura, Gampaha, Galle, Kalutara and Kandy were converted to fully fledged branch status while three window offices in Jaffna, Killinochchi and Batticaloa were opened to provide a convenient reach to all its leasing customers. The Company has planned to upgrade more window offices to fully fledged branches during the current financial year.
The Company commenced mobilizing public deposits in August 2012 subsequent to the receipt of the Finance Business license from the Central Bank of Sri Lanka in June 2012. During the year the company has also added Gold Loans to its product lines to become a full service provider in the Financial Services Sector. The company pioneered the concept of a 365 day leasing through its upgraded Welisara branch in December 2012.
Orient Finance PLC is licensed under the Finance Business Act No.42 of 2011 by the Monetary Board of the Central Bank of Sri Lanka. It has a Rating of BBB- (Stable outlook) from ICRA Lanka. Its main lines of businesses’ are Leasing, Hire Purchase, Debt Factoring, Gold Loans and acceptance of Fixed Deposits.
source - www.island.lk
According to the un-audited Interim Financial Statement for the Financial Year ended 31st March 2013 released to the Colombo Stock Exchange, Orient Finance PLC has recorded a 23% increase in Net Profit after Tax over the previous year to Rs. 168.4 Mn. This is the highest ever profit made by the Company in its decade of operations.
Income for the year recorded a growth of 70%, registering Rs. 825 million as against the Rs. 529 million income recorded in the previous year.
The Company’s Earnings Per Share (EPS) improved to Rs. 1.46 for the year from Rs.1.30 recorded in the previous year which is a 23% increase.
By the end of the financial year, the Company’s net lending portfolio increased to Rs.3.3 Bn from Rs. 2.2 Bn as at 31st March 2012 recording a 49% growth despite the decrease in the overall demand for motor vehicles.
During the year, five window offices located at Anuradhapura, Gampaha, Galle, Kalutara and Kandy were converted to fully fledged branch status while three window offices in Jaffna, Killinochchi and Batticaloa were opened to provide a convenient reach to all its leasing customers. The Company has planned to upgrade more window offices to fully fledged branches during the current financial year.
The Company commenced mobilizing public deposits in August 2012 subsequent to the receipt of the Finance Business license from the Central Bank of Sri Lanka in June 2012. During the year the company has also added Gold Loans to its product lines to become a full service provider in the Financial Services Sector. The company pioneered the concept of a 365 day leasing through its upgraded Welisara branch in December 2012.
Orient Finance PLC is licensed under the Finance Business Act No.42 of 2011 by the Monetary Board of the Central Bank of Sri Lanka. It has a Rating of BBB- (Stable outlook) from ICRA Lanka. Its main lines of businesses’ are Leasing, Hire Purchase, Debt Factoring, Gold Loans and acceptance of Fixed Deposits.
source - www.island.lk
Saturday, June 15, 2013
Friday, June 14, 2013
We are almost there for a recovery - History is repeating
(click image to enlarge)
* The lowest ASI reported was 4737.75 on June 6 2012.
* The ASI moved up to 5078.06 after that until 20 June 2012. - first stage of recovery we witnessed.
* After that ASI took a dip and came to 4822.64 on 18 of July 2012.
* Once again a recovery was witnessed until 28 Sep and the ASI hit 6000 all important mark and ended up at 5971.99 - second stage of recovery.
* Again a mkt dip took place which is a natural behaviour in every mkt in the world. ASI dip up to 5323.21 and the lowest reported date was 05 December 2012.
* After that we witnessed another recovery up to 5883.66 until end of jan 2013. - third stage of recovery.
* Mkt was hit by another dip and this time ASI ended up in 5626.77 on 5 march 2013.
* The all important mkt recovery took place after that and that bull run helps to touch ASI all important mark of 6500 for the first time almost after two years. ASI hit 6488.85 on 23 may 2013. - fourth stage of recovery
*Now we are witnessing another dip in the mkt which is necessary for the all important fifth stage of recovery where we can expect ASI to hit 6750 levels or more.
Important points to remember
* look at the RSI movement of the mkt at every mkt bottom and at the highest point in every recovery. - We are almost there.
* look at the movement of ASI between Bollinger bands in every bottom and every recovery - We are almost there.
* look at MACD movement at every mkt bottom and every recovery. - We are almost there.
* After hitting low of ASI 4737.75 in June 2012 mkt is heading towards upward direction with required corrections from time to time.
( This is only the personal view of the writer )
source - yahoo finance
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