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| Monday, 01 November 2004 |
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HNB Stockbrokers' weekly market review Sporadic pockets of profit taking disturbs the Bull Run Market took a breather after two weeks of sharp gains as local investors took profits in selected retail counters. The ASPI was down 30.8 points or 1.97% compared to the previous week's close of 1534.5 points. The Milanka Price Index (MPI) too showed a similar trend, to close at 2194.8 points, down by 38.2 points of 1.72%. However, the activity remained skittish, with a turnover of Rs.1.33 billion during the four trading days at a daily average of Rs.331.6 million. Royal Ceramics remained a major contributor to the weekly turnover with approximately Rs.149.5 million after 121 million shares being traded following the share split. Interest on the counter, was further boosted by the declaration of a 10% interim dividend by the company. Foreign Purchases for the week totaled Rs.238 million while the foreign sales stood at Rs.153.1 million for the week, resulting in an inflow of Rs.84.9 million for the week. Foreign participation for the week stood 14.7% of total activity. One of the major highlights for the week came in the form of investors scrambling to buy Lanka Hospital (Apollo Lanka) counters, on the back of a news paper report published, stating, Nawaloka was eying on a 20% stake of the company. The counter was seen trading at a all time high of Rs.19.00 per share as trading started on Tuesday but settling down to moderate levels during the course of the day as Nawaloka Hospitals refuted the claim. Approximately 5.7 million of Apollo shares traded on Tuesday closing at Rs.14.50per share. Among the heavily traded counters for the week were Royal Ceramics, Marawila Resorts, Galadari, Kelani Tyres and Colombo Land. Indices went through an inevitable but anticipated technical correction, as investors booked profits in some selected counters. The correction is not expected to push the indices on a continuous downward trend, with bargain hunters expected to enter the market once the prices fall to attractive levels. Investors little react to slow down in economic indicators Investors are still riding on the extra confidence on peace certainty, thus the hiccups in the macro economic indicators would have little impact towards the market behaviour in the short run. The exchange rate crossed the Rs.104/ US$ levels this week despite the Central Banks intervention, as the import bills rose to a high amid the rising global oil prices. Meanwhile the October inflation has jumped up to 6.1% from 5.4% at end September, largely due to the recent hikes in the fuel prices. Despite the inflationary pressure, the 12-month Treasury bill rates stood almost static at 7.6% during the week. We still maintain our end year inflation projection at 6.8%, while we envisage a marginal interest rate hike towards the end of the year. Amid the mixed sentiments we expect the market to fluctuate in a wider range with a combination of profit taking and bargain hunting. With strong results expected from selected counters we believe that the investors should take some profits if the stock prices starts to move up with earnings announcements. Asian Hotels and Properties 1H FY2005 Results Asian Hotels and Properties Ltd. 1H FY2005 results saw a 20% drop in revenue to reach Rs.1.23 billion with the slow down in apartment sales. The total earnings after minority interest were down by 22% to Rs.223 million resulting in an EPS of Rs.1.01 At a market price of Rs.30.50 and an annualised EPS of Rs.2.02 this resulted in a PE multiple of 15.1x. The Net assets per share as at the end of Sept, 2004 was Rs.36.92 yielding a PBV of 0.83x. The views based herein are expressed with no malafide intentive to any party whatsoever based on already published data and from the information obtained by the research team. No matter published as above creates any liability of any kind whatsoever on HNB Stock Brokers Pvt Ltd or its associates. The views cannot be reproduced in any form without the explicit (written or otherwise and photocopied) permission from HNB Stock Brokers (Pvt) Ltd. |
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