First trading day of week ended positive sign. The ASPI and MPI gaining 0.5% and 0.4% respectively to close at 4949 and 4570. Turnover jumped to 1.8 bn due to Asiri Hospital Holdings and Asiri Central collectively accounting for 69% of the day’s total.
Gainers outpaced losers with SMB Leasing(X), Selinsing and Shalimar rising by 33.3%, 29.3% and 16.7% and offsetting losses in Singalanka, Miramar Beach and Amana Takaful which declined by 14.2%, 7.0% and 6.3% respectively.
Meanwhile, major Asian stock markets traded lower today but Japan's benchmark rose as a result of the weakeningyen, which helped support the country's larger exporters.
In corporate news, C T Holdings (CTHR) reported a revenue growth of 24% to LKR16.7 bn while gross profit increased by 27% to LKR2 bn during 1Q2012/13. The company’s gross profit margin improved marginally to 12.2% from 11.9% during the previous comparable period.
Net profit of the group meanwhile declined by 25% to LKR325 mn as a result of higher operating and finance costs during the quarter. The Retail & Wholesale Distribution segment was the largest contributor towards the group’s revenue and profitability having accounted for 72% and 66% respectively while the Ceramic & Tiles segment reported a loss of LKR5.7 mn due to lower margins and higher finance costs on borrowings obtained for the expansion of factory capacities.
Contrary to widespread belief, investing in the bourse has not been completely abandoned as pockets of investors appear to be adopting a highly selective approach in order to pick value in the market. While we concede with the fact that the majority of investors have largely been sitting in the wings over the last few weeks in anticipation of a market trigger that would propel the market to the next level, heading further into the 3rd quarter, we advise investors to refrain from assuming any speculative positions but concentrate on carefully selecting counters that will benefit from the robust domestic consumption story and report sustainable earnings growth and healthy cashflows notwithstanding high energy and interest rates.
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