BRS Mid Year Equity Strategy 2025 - Full Potential Yet to Unfold, Equities Hold the Edge

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Strategy Reports
07/07/2025
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📢 Full Potential Yet to Unfold – Equities Hold the Edge 🧭 BRS Mid-Year Strategy | 2025 We remain Overweight Equities as 🔑 fundamentals, liquidity & valuations align to fuel the next leg of the market re-rating. 🧭 Key Drivers: 🔒 IMF Discipline & Political Stability – Credibility restored, risk premium easing 💸 Low-Yield, Tax-Efficient Environment – Equities > AWFDR (5.9% post-tax vs. 9.3% pre-tax) 📊 Liquidity Rotation – LKR 4.1bn avg. daily turnover in 2025 YTD (+70% vs. 5Y avg) 📈 Earnings Growth – LKR 672bn ➡️ 762bn from 2025E to 2026E 📉 Valuations Still Attractive – 2025E PE at 9.6x vs. 10Y avg. of 11.1x → 15% upside to ASPI 20,750 📍 Technicals Confirm Trend – EMA crossover, MACD strength, RSI in bullish territory 💰 Top Buys: COMB (N & X) | HNB (N & X) | SAMP | COCR | LFIN | JKH | HHL | CCS | CIC (N & X) | DIST | CTC | HAYC | TJL | PACK 🟡 Hold (Moderate Upside <15%): SUN | LLUB | GLAS ⚠️ Risks: IMF reform slippage, US tariff shocks, geopolitics, capital outflows 📊 ASPI fair value: 20,750 | Momentum intact ✅
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