Market continues upward momentum

Channa Kasturisinghe

BOURSE: Both indices gained considerably yesterday and the turnover was once again high on a trading day there were more gainers than losers. Foreign interest into blue chips continued to boost the market and analysts are of the view that it is a good time for medium and long term investors to buy shares of fundamentally strong stocks.

The All Share Price Index closed at 2,277 points up by 12.64 and the Milanka Price Index moved up by 6.37 points to close at 2,884.03. Although the turnover was not as high as on Friday when it reached over Rs. 1.6 billion, it was a healthy Rs. 538.6 million mainly helped by Distilleries of which over 2.5 million shares were traded.

It was yet another healthy performance by the Colombo Stock Exchange following the United People's Freedom Alliance's resounding victory at the recently concluded local government elections.

Analysts said that there were 101 gainers compared to 32 losers and over 25 million shares were traded on a day majority of stocks moved up at least marginally. They said positive developments in the political front such as strengthening of the government and smooth progress of the peace process would undoubtedly provide some opportunities for investors in the market.

"In the macro economic scenario the drop in the inflation rate which could cause the interest rates also to come down and as a result the stock market will be an attractive investment option for investors," an analyst said.

There was a transfer of over 2.5 million shares of Distilleries, which was believed to be a local to foreign transaction. The crossing was at Rs. 46 a share. The stock contributed Rs. 116 million to the total turnover. One hundred thousand shares of John Keells Holdings was also sold by a foreign party to a local at Rs. 159. Venture Capital was another heavily traded stock of which 7.5 million shares traded contributing Rs. 74 million to the turnover.

There were foreign buying into Dialog but analysts said that investors should focus more on Sri Lanka Telecom which is at the moment an undervalued stock.