8/3/2019 Market Watch Daily 14.10
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Daily
14th October 2011Market Indices Market Performance
14.10.2011 13.10.2011 %Chg.ASPI 6,550 6,586 -0.5MPI 5,878 5,911
-0.5Turnover (bn) 1.0 1.2 -17.7Foreign Purchases (mn) 122.1 161.2
-24.3Foreign Sales (mn) 157.8 95.1 65.9Traded Companies 268 227
18.1Market PER (X) 16.8 16.9 -0.6Market Cap (LKR bn) 2,353 2,366
-0.5Market Cap (US$ bn) 21.2 21.3 -0.5Dividend Yield (%) 1.6 1.6
0.0Price to Book (X) 2.1 2.1 0.0
Market Outlook
Gainers /Losers (%)
Significant Trades (Turnover in LKR Mn)
Global Markets Interest Rates & CurrenciesIndex %Chg. .
.14.10.2011
Sri Lanka - ASPI 6550 -0.55 Prime Lending Rate (Avg. Weighted)
9.1%India - Sensex 17083 1.18 Deposit Rate (Avg. Weighted)
6.5%Pakistan - KSE 100 11992 0.27 Treasury Bill Rate (360 Days)
7.3%Taiwan Weighted 7358 -0.95 Dollar Denominated Bond Rate
6.3%Singapore - Straits Times 2744 0.37 LKR/US$ (Avg. Rate)
111.1Hong Kong - Hang Seng 18502 -1.36 LKR/EURO (Avg. Rate)
153.7
Disclaimer
DNHMARKETW
ATCH
0
20
40
60
80
100
120
DIST JKH CSD SEYB
18.5
12.8
10.5
6.6
-26.7
-14.3
-7.7
-7.2
Samson International
Union Chemicals
City Housing & Real Estate
The Finance
Infrastructure Developers
Associated Motor Finance
SMB Leasing (W0015)
Softlogic Finance
5,700
5,900
6,100
6,300
6,500
6,700
6,900
7/10/2011
10/10/2011
12/10/2011
13/10/2011
14/10/2011
ASI
MPI
DNH Financial (Pvt) Ltd.www.dnhfinancial.com
+94115700777
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correct. Although allreasonable care hasbeen taken to ensure
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This isnot anofferto sell orbuy the
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EnvironmentalResourcesInvestment PLC (ERI).
The market continued to drift lower with both the ASPI and
MPIdown by 0.5% each to close at 6550 and 5878 at the end of
thesession. Losers outpaced gainers with Infrastructuredevelopers,
Associated Motor Finance and SMB Leasing (W0015)declining by 26.7%,
14.3% and 7.7% offsetting gains in SamsonInternational, Union
Chemicals and City Housing & Real Estatewhich advanced by
18.5%, 12.8% and 10.5% respectively.Turnoverfell below the LKR1 bn
mark with trading in Distilleries, John KeellsHoldings and Seylan
Developments accounting for 27% of thedaystotal. Global markets
traded mostly lower today after Standard &Poor'scut Spain's
long-termcredit ratingby onenotch to "AA-" from"AA" with a negative
outlook, in turn renewing concerns about theextent of Europe's
fiscalwoes.
3Q2011Earnings Outlook
Although the bulk of the domestic 3Q2011 corporate results
areunlikely to start rolling in until at least the next couple of
weeks, wewould like to summarize ourearningsoutlook as follows;
Descending to the 6500 support level,it iseasyto shy away from
themarket on the conviction that it maylose further ground due to
thelack of anyrelevant support.
While we dont rule out the possibility of a marginal decline
onthe back of retail selling in some counters, we are
neverthelesssufficiently convinced that the 3Q2011 results should
garnerinterest from select institutional and foreign investors who
mayadopt a handpicking approach focusing on counters that presents
trong and sustainable value in high growth and defensive
sectors. Consequently we recommend an asset allocation
strategyfocusing on key sectors such as Banking &Finance,
manufacturing, Diversified and Hotels which we believewould
outperform the market andgenerate alpha on a sustainablebasis.
While earnings growth will be broadly similar to 2Q2011,
weexpect the quality of earnings to improve during the 3Q2011with
greater contribution from core operations spearheadingtheearnings
drive while non-core activities will largely play secondfiddle.
Top line revenues will grow by 30-40% during the quarter onthe
back of an acceleration in the domestic consumption
cyclenotwithstandingheadwinds in the global markets.
Consolidated margins will improve both on a YOY and QoQbasis on
the back of core growth in operations which wouldsmoothen out
relativelylower other income generation.
Overall earnings will be up by 25-30% spearheaded by growthfrom
the banking, diversified, manufacturing and tourismsectors.
