CSE News Updates

Sri Lanka’s premier blue-chip, John Keells Holdings (JKH) has lost its status in the Colombo Bourse as the proxy to other stocks in the market where low capitalised stocks have now over-ridden JKH in terms of liquidity while market velocity has over-ridden that of JKH, suggests a recent Equity Research report. This report published by TKS Securities Ltd based on the group’s recent Interim Results states that in the recent past JKH was not seen aggressively tapping the opportunities presented specially aftermath of the war.
“JKH as the premier blue-chip in the country and being the proxy to the market was trading at a premium to the market in the past due to its dynamism and aggressive mode of value addition to the group. However, in our opinion the counter no more serves as the proxy to the market where low cap stocks have over-ridden JKH in terms of liquidity and Market velocity has over-ridden that of JKH,” the report stated.
It noted that in the past, JKH was viewed as the most aggressive company which swiftly grabbed opportunities and exploited them to make the maximum profits.
“However, during the past five years we have failed to see such dynamism from the company. Though, it has been a good two years since the end of the war, no satisfactory developments thus far in investments have taken place,” the report noted.

The report highlighted that despite the upbeat in the tourism industry, JKH has invested in constructing only one hotel with 190, 3-star rooms in Beruwala and has repositioned only three out of the total 7 resorts.
“However, it is noteworthy that the company is negotiating to secure a management contract to operate a 3-star business hotel in Colombo. Conversely Aitken Spence Hotel Holdings and privately held Jetwing Hotels have been more aggressive in this regard and have heavily invested in expanding the hotel portfolio as well as improving the brand image. Since the end of war AHUN’s fresh investments are around 57% of their total assets, whilst JKH’s fresh investments over leisure sector assets reads 23%,” the report pointed out. (AR)

source -  www.thebottomline.lk