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| Monday, 14 February 2005 |
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HNB Stockbrokers' weekly market review Bull Run dampens amid profit taking After weeks of upward movement, the indices fell during the latter part of the week due to profit taking and concerns over the peace process. The week began on a strong footing, with the ASPI soaring beyond the 1700 point mark, creating a new milestone in the history of the Colombo stock exchange. The ASPI rose further on Tuesday closing at 1719.8 points. However, Wednesday saw the index slumping to 1705.4 points due to profit taking. The index picked up marginally on Friday. The week closed on Friday with the ASPI standing at 1708.9 points up 20.7 points or 1.23%, compared to last Friday's levels. The MPI retained a similar trend slumping on Wednesday, to 2354.8 points. The MPI closed the week at 2354.8 points up marginally by 6.5 points or 0.28%, compared to previous week's closing balance. The week saw high volumes of Tess Agro, Blue Diamonds and Royal Ceramics shares being traded. Approximately 17.9 million of Tess Agro counters traded, on the back of a share split which came into play on Tuesday, splitting 10 rupee shares into 1 rupee shares. The counter closed on Friday at Rs.1.25 per share. A total of approximately 10.5 million Royal Ceramics shares were seen trading for the week. The recently released third quarter results, of Royal Ceramics showed the company's Net profits increasing by 194% compared to the corresponding period of FY2004, standing at Rs.168.7 million for the nine month period of FY2005. The total turnover was at Rs.2.23 billion. It declined during the latter part of the week, with reduced activity. Comparing the average daily turnover for the week, which stood at Rs.446.7 million, with last week's average turnover of Rs.467.2 million, we can identify a decline of 4.38% week on week. The main contributors to the weeks profit were JKH, LIOC and Lankem Development. Interest on JKH counters continued contributing approximately Rs.358.1 million to the total turnover. While approximately 2.56 million shares traded closing the week at Rs.137 per share declining by Rs.3.50 from the previous week's close of Rs.139.50 per share. LIOC contributed Rs.233.3 million to the week's turnover, with approximately 4.36 million shares trading. However, the week saw a decline in the volumes traded of LIOC shares where approximately 5.8 million shares were seen trading the previous week, with the week consisting of 4 trading days. Lankem Development saw around 6.58 million shares trading, contributing Rs.193 million to the week's turnover. Lankem Development saw it's prices appreciate considerably from 104.1% compared to the previous weeks closing price of Rs.18.25, to close the week at Rs.37.25 per share. The Fortress hotel shares saw much investor interest on the back of a rights announcement. The company announced a rights issue of 2 for 3 on February 02, 2005 subject to approval. Approximately nine million of The Fortress counters were seen trading contributing around Rs.117.6 million to total turnover. The week saw foreign investors being net buyers standing at Rs.48.7 million. The foreign purchases stood at Rs.397.5 million sales stood at Rs.348.8 million. Meanwhile foreign participation for the week stood at 16.7% of total activity. Among the heavily traded stocks, Tess Agro, Blue Diamonds (Non Voting), Royal Ceramics, The Fortress and Lankem development. Market to be less responsive to political development Investors were buoyant at market place, with the positive trend advancing to another week. As pointed out last week, a technical correction was inevitable after a continuous strong rally and the investors booked profits, with the break off of political issues. With the political setbacks expected to continue, we believe that the indices would remain volatile, but any dips in the stock prices are expected to be picked by the bargain hunters, who would resist any sharp decline in the indices. With investors strongly believing in long-term peace, we feel that it is highly unlikely that the market activity would be significantly affected by the present political developments. |
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