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Monday, 26 April 2010

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Bourse continues shining momentum

Hotel and Banking sectors perform well:

ASPI comfortably pierced the 4,000-points on Monday, hitting a new high as investors returned after holidays enthused by anticipated higher corporate earnings and political stability.


The Colombo Stock Exchange performs well. Picture by Sudath Nishantha

The more sensitive MPI (Milanka Price Index) however showed a greater increase gaining by 178.1 points or 3.9 percent closing the week at 4695.8 points.

Hotel Services (SERV) contributed Rs 1.8 billion to the total market activity this week after trading 59.9 million shares in volume, becoming the largest contributor for the week.

Hotel Services edged higher to close the week at Rs 31.00 per share compared to last week’s closing price of Rs 28.00 per share, whilst trading between a price band of Rs 27.75 and Rs 32.00 per share over the week’s trading.

Apart from the above, Keells Hotels and Sampath Bank contributed considerably to the week’s turnover. Keells Hotels contribution was approximately Rs 725.4 million and Sampath Bank contribution was Rs 481.4 million to the total turnover, with approximately 33.7 million Keells Hotels and 1.8 million Sampath Bank shares trading during the week. Keells Hotels saw its price appreciating by 2.47 percent to close at Rs 20.75 per share this week, while Sampath Bank ended the week at Rs 284.75 per share which is an appreciation of 19.5 percent Week-On-Week.

Turnover for the week amounted to a staggering Rs 9.9 billion, which was a 180.2 percent improvement compared to last week’s total activity of Rs 3.5 billion. The average daily turnover stood at Rs 1.98 billion compared Rs 1.18 billion posted last week.

Foreign participation this week stood at 20.4 percent of total activity. Foreign Purchases for the week totalled Rs 1.2 billion, while foreign sales were significantly higher at Rs 2.9 billion this week. The resultant net foreign outflow amounted to Rs 1.7 billion. Volume wise highest traded stocks this week were, Hotel Services, Nawaloka, Keells Hotels, Tess Agro and Reefcomber.

Political stability gives clarity and direction

The week ended April 23, saw the ASPI move 154.7 points, and the MPI 178.1 points. The week started 19.04.10 saw high investor participation after the holiday season. For the month of April the ASPI index has seen a significant growth with approx 400 points or 10% up from levels of 3725.

Our prediction of the ASPI reaching 4000 was achieved during this week.

Our prognosis would be the ASPI to move to the 4200 levels in the next week with occasional profit taking.

We expect the bourse to appreciate further in the medium term, with positive perception in the political arena due to stability and consistent policy framework and with the expectation of improved corporate earnings.

From a sector perspective hotel, plantation, beverage and food and construction sectors are expected release noteworthy earnings.

As per the latest earnings released, Hunas Falls and Lighthouse hotel have recorded annual profits of Rs 23mn (190 percent YoY growth) and Rs 5.7mn (164 percent YoY growth) respectively.

The hotel sector earnings have been driven by the increase in the tourist arrivals recording a 50 percent quarter on quarter growth to 160,000 approx (cumulative from January to March).

(The information contained herein has been compiled from sources that Acuity Stockbrokers (Private) Limited (ASB) believes to be true and reliable but we do not hold ourselves responsible for its completeness or accuracy. No matter published herein create any liability of any kind on ASB. All opinions, views, findings and conclusions included in this report constitute ASB’s judgment of this date and are subject to change without notice.)

 

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