Let's look at CFVF first,
Annual report 2010/11
If you carefully analized the income statement the tax was taken as positive contribution to 2010/11, In 2009/10,it was negative. Here is the explanation from the annual report.
"First Capital Treasuries Limited (subsidiary company) is a primary dealer licensed by the Central Bank of Sri Lanka whose interest income derived in primary market transactions does not form as a part of receipt on trade or business for the purpose of computing statutory income of the company in accordance with the section 32 of Inland Revenue Act No. 10 of 2006.
In a decision made by the Board of Review of Department of Inland Revenue in respect of income tax for the year 2003/04 acknowledged the above position in July 2010. The Board of Directors of First Capital Treasuries Limited, based on advice received from their tax consultants, have made a decision to reverse tax provisions for year 2003/04 - 2009/10 amounting to Rs 412.8 million in the Financial Statements for the year ended 31 March 2011. No tax provisions have been made in the financial year 2010/11. However this judgment does not preclude the Inland Revenue from issuing assessments in the future. Further, details relating to current assessments have been disclosed in Note 31(e) to the Financial Statements (Contingent liabilities).
Notes to the Financial Statements Contd."
Let's assume there is no tax at all for the year 2010/11,then EPS will be 5.6
if tax plus the EPS might go down to 3-4.
Income reduction is 38% for the year 2010/11
More importantly cash flow is negative.
All these factors contribute to the stagnating of share price.
In case of CSEC explanation is same.
Experts please correct me if I'm wrong.