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Thursday, January 20, 2011

Colombo Bourse closes at record high

Sri Lanka stocks close at all time high, up 1.9- percent Thursday at an all time high, brokers said. The All Share Price Index closed at 7,193.10, up 1.91 percent (134.77 points) while the Milanka Price Index of more liquid stocks closed at 7,300.68, up 0.72 percent (52.48 points) according to stock exchange provisional figures. Turnover was 4.6 billion rupees.
Commercial Bank closed at 278.80, up 1.90 rupees and Hatton National Bank closed at 390.20, down 9.20 rupees.
John Keells Holdings closed at 298.30, up 5.40 rupees with over a million shares done and Aitken Spence closed at 187.90, up 0.40 cents.
Dialog Axiata closed flat at 11.80.

Janashakthi Ltd has increased its stake on Dunamis capital PLC

·       Janashakthi Ltd has increased its holding to 21.32% with the acquisition of 1271300shares of  Dunamis capital PLC on 20th januaray 2011.  Dunamis capital PLC manages a portfolio of investments consisting of diverse business operations, which together constitutes the Dunamis Group and provides function based services to its subsidiary and associate companies.

Sierra cables are going to invest in hotel sector

 As per the announcement  made by the company, they are going to invest RS 250 mn in two hotel project in the leisure sector under the joint venture agreement with the free lanka capital holding.
In 2010 tourist arrivals were up 46 percent to 660,000 after a 30-year war ended in May 2009.
Colombo is to see at least two 500 million dollar hotel and apartment development complexes on state land and existing leisure chains are also building new hotels in the coast.

Saturday, January 15, 2011

Warren Buffett's Suggestion on IPOs

Warren Buffett recommends avoiding IPOs, for the following reason: "It's almost a mathematical impossibilityto imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one beingsold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors)."

spread

1. The difference between the current bid and the current ask (in over-the-counter trading) or offered (in exchangetrading) of a given security; also called bid/ask spread.

2. The purchase of one option and the simultaneous sale of a related option, such as two options of the sameclass but different strike prices and/or expiration dates. also called spread option.

3. More generally, the difference between any two prices.

Benefits and Risks Associated with Bonds

While bonds traditionally earn lower returns than stocks, that does not mean there isn't a place in your portfoliofor bonds. The most common reason for investors to purchase bonds are below:
  • Diversification - Bonds tend to be less volatile than stocks and can therefore stabilize the value of your portfolio during times when the stock market struggles. Having a combination of both types of investmentsover the long term can often provide comparable returns with less risk than a portfolio devoted to only one type of investment.
  • Stability - If investors know they will need access to large sums of money in the near future-for example, topay for college, a home, etc.-then it does not make sense to place that money in a highly volatile investment like stocks. Because the majority of the return on bonds comes from the interest payments (the couponpayments), fluctuations in the price of a bond will have little impact on the value of the investment.
  • Consistent Income - Unlike stock dividends, coupon payments are consistently distributed at regular intervals. Individuals seeking this consistent income might find bonds a better alternative than the dividend payments some stocks offer.
  • Bonds are often called "fixed income" investments, but don't let that term fool you. Bonds are not riskless investments. While they are usually considered much safer than stocks, bonds can still lose value while you hold them. Here is a brief look at some of the risks associated with bonds:
    • Interest rate risk - Bond prices are inversely related to interest rates, so if interest rates increase, the price of the bond will decrease. The interest rate on a bond is set at the time it is issued. Generally, the coupon will reflect interest rates at the time of issuance. However, if interest rates increase, people will be unwilling to purchase the bonds in the secondary market at the earlier rate. For example, if the coupon is set at 6%and interest rates in the market are at 7%, the interest rate on the bond is well below what you could get from a different investment. Therefore, the price of the bond will decrease so that the capital appreciation will make up for the difference in interest rates. 

Monday, September 27, 2010

CSEC.N is it worth to buy?

Principal activities
The Company manages a portfolio of investments consisting of diverse business operations, which together constitutes the Dunamis Group and provides function based services to its subsidiary and associate companies.

The Group recorded revenue of Rs.3.7 billion as against Rs. 2.75 billion last year. Compared to the Loss after tax of Rs. 394.5 million last year, they achieved a remarkable turnaround with a Profit after tax of Rs. 353.5 million this year.Such favourable reversal is attributable primarily to the exceptional performance of the First Capital Group and also the Kotmale Group.they have reduced their finance & other cost  as a result of implementing stricter financial discipline and the significant reduction in borrowing costs.
The Group’s activities comprised of Financial Services, Dairy Products, Housing Development, Land Sales and Educational Material Export,
in addition to that group recorded   PAT  Rs 126890 for the last quarter.
#csec                                                                                    
                                                                                               
                 Qtr " 000'                                                                           

 30/06/2010
 31/03/2010
 31/12/2009
 30/09/2009
 30/06/2009






PAT
 126,890
 (82,800)
 2 48,857
 1 49,832
   58,303






EPS
 1.00
                (0.45)
                    1.65
                        0.88
    (0.14)






                                                                                               
Total for F/Y 2009/10                      353,504                                                               
                                                                                               
Last 12 month profit                             374,192                                                               
No Of shares                                   98,397,640                            
EPS                                                           3.80                                                         
                                                                                               
ROE        30/06/2010         31/03/2010                                                       
PBIT       188,511                 (106,020)                                                           
                                                                                               
ROCE     19%        -14%                     
ROE        20%        -15%                                                     
                                                                                               
Current trading PER                            3.42                                                      
Sector PER                                       34.60                                                       
Annualized EPS                                   4.00                                                        
                                                                                               
Expected MV                    Rs 13.68                                                   
                                                                                               











if we assume it is trading with 5 PER   expected MV - Rs 20                                                 










Debt to equity ratio - 7%