“Fundamental stock picking” call of the hour, says Asia Wealth

Long prevailed dull sentiments further extended to this week resultant from investors adapting a cautious wait-and-see approach in the midst of significant volatility that can be caused by the Expropriation Bill and upcoming Budget.

Investors have placed more concerns over the Budget due to the Government’s high emphasis on reducing the trade deficit, which can give rise to hikes in taxes, etc.

The Expropriation Bill to take over underperforming enterprises and underutilised assets has also created some volatility in the market. However, during mid week the Expropriation Bill was passed through Parliament, resulting in halting trading in Hotel Developers (Lanka) and Pelwatte Sugar Industries.

We also observed that investors were not responding positively towards favourable September quarterly results. Bearing all these we advise our investors to gain the advantage of discounted prices prevailing in the market in fundamentally-sound blue chip and growth stocks and to hold on to those investments towards the longer term, which has already been the strategy of few institutional, high net worth and foreign investors.

(Excerpts from Asia Wealth Management’s Weekly Report)

Asia Wealth’s recommendations

Tokyo Cement

Colonial Motors

Expolanka Holdings

John Keells Holdings

Asian Hotels

CIC Holdings

Commercial Bank

Distilleries Company

HNB

Chevron Lubricants

LB Finance

Royal Ceramics

Sampath Bank