Market reflects improved investor confidence

The Stock Market continued its upward movement yesterday with the All Share Price Index (ASPI) gaining 17 points to close at 2,241 points and the Milanka Price Index (MPI) increasing by 6 points to close at 2,878 points.

During the early part of the day, the ASPI moved up by over 60 points but later it came down as the investors were keen on profit taking. Once again the foreigners were the net buyers and they showed interest in the telecommunication sector.

Large amounts of Dialog and SLT share were traded during the day. 7.6 million dialog shares and 3.2 million SLT shares were traded and the share prices of both increased by 50 cents each. The new entrant to the Colombo Stock Exchange Sierra cables was also among the heavily traded stocks. Over 14 million Sierra shares traded and the share price was unchanged at Rs.3.75 at the closing.

The market turnover yesterday was Rs. 529 million with over 35 million shares being traded. Market capitalisation which increased by Rs. 21 billion on Tuesday further improved by Rs. 5 billion yesterday to Rs. 680 billion.

The Vice President DFCC Stock Brokers (Pvt) Ltd, Shafy Wahid said that there was a significant improvement of the market activity and that investors were selectively buying fundamentally sound stocks.

The majority of turnover generated from top 10 blue-chip companies. Dialog GSM contributed Rs. 140 million to the day's turnover, he said.

Angelo Ranasinghe of the Bartleet Mallory Stockbrokers said that although the market has improved satisfactorily following the initial hiccups just after the Presidential election investors are still waiting for positive signals from the political front.

"The investor confidence will heavily depend on what kind of message the LTTE leader's heroes day speech would convey," he said.

Research Analyst of C T Smith Stock Brokers (Pvt) Ltd, Dilhara Haputhanthri said that although the market improved during the last couple of days still there was a two per cent overall drop in the stock market since the election.