Mixed sentiment to continue

The market remained dull for the week, with both indices showing a downward trend. The lackluster behaviour of the stock market was due to a combination of political uncertainty and due to investors moving to cash ahead of the Dialog IPO, which is due to open on the July 7. The ASPI (All Share Price Index) closed the week at 1900.3 points down by 1.18% or 22.7 points, while the MPI (Milanka Price Index) closed the week at 2680.7 points down by 1.48% or 40.3 points.

The major trade for the week was the sale of 2.76 million of NDB (National Development Bank) shares, which was held by NSB (National Savings Bank) to a foreign party. The sale which saw an approximately 5% stake of NDB being sold off, went through at a price of Rs. 173 per share.

With this sale NDB became the highest contributor to the week's turnover, with Rs. 480.3 million. The share closed the week at Rs. 164.25 per share. SLT retained the spot light for another week running becoming the highest traded stock, for the week. Around 7 million of SLT shares traded for the week at a high of Rs. 23 and a low of Rs. 21.75 per share. The stock managed to contribute a notable Rs. 165.1 million towards weekly turnover. Ceylon Glass saw renewed interest with 1.48 million of its share trading. The share traded at a high of Rs. 36.25 and a low of Rs. 33.25 per share to close the week at Rs. 34 per share. The total turnover for the week stood at Rs. 1.44 billion, resulting in an average daily turnover of Rs. 287.9 million. Comparing average daily turnover levels Week on Week, an 18.8% improvement in turnover levels was seen this week.

The major part of turnover came on Monday, with the above stated sale of NDB shares (Monday's turnover stood at Rs. 717.9 million).Foreign investors remained net buyers for the week amounting to a substantial Rs. 532.6 million. The buying of NDB shares by a foreign party led to the rise in foreign purchases for the week amounting to a high of Rs. 701.4 million. While, foreign sales remained at Rs. 168.8 million. Foreign participation for the week was notably high at 30.2% of total activity compared to 21.8% last week. SLT, National Development Bank, Asiri Medical Services, Ceylon Glass and Nawaloka were the highest traded stocks for the week.

As expected, market remained mixed amid the current political uncertainty, with both indices moving to negative territory. Despite selected trades in a few counters, the retail participation was somewhat at a lower level.

Political uncertainty continues

Meanwhile, according to Tamilnet, Liberation Tigers of Tamil Eelam (LTTE) at a meeting with members of Sri Lanka Monitoring Mission (SLMM), has demanded that the Government of Sri Lanka (GoSL) should provide a clear response within 14 days on procedures to ensure safety of travel for LTTE cadres in the East. The protest campaigns against the Post Tsunami Operational Management Structure (P-TOMS), were seen during the week but was not as bad as original expectations.

While placing concern on certain issues in the agreement, we believe that all parties should now take forward the development work while giving careful consideration to the views of all related parties. We stress the importance of strong leadership in achieving such corporation and reiterate our view that the cautious implementation of development work is essential given the present political climax.

We expect the markets to remain volatile in the coming weeks with investors looking for bargains in the event of profittaking. Indices are unlikely to dip drastically unless the peace and political issues reach to hype. We advise the investors to stick to fundamentally sound counters and look for bargain hunting opportunities.

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