[HNB Stockbrokers’ weekly market review]

Market picks up during weekend casting positive sentiments

STOCK MARKET: The market rebound this week, after going through a market correction for three consecutive weeks. The correction, saw the ASPI (All Share Price Index) losing 232 points or 8%, while the MPI (Millanka Price Index) lost 386.8 points or 9.2%.

Even though both indices gained this week, the gains lacked the ability to fully recover the losses made during the past three weeks.

The ASPI picked up by a significant 133.5 points closing the week at 2862.7 points, while the MPI rose by 137.5 points to close at 3935 points on Friday. Though sentiments were positive this week, it did not appear to be strong with moderate activity and low volumes trading.

Blue chips JKH, SLT and Commercial Bank occupied the top 3 slots in terms of contribution towards turnover this week, while constituting 44% of the total turnover.

Renewed interest on JKH saw the counter contributing Rs.439.3 million towards the week’s turnover, becoming the highest contributor for the week.

The share price rose by 9.8% for the week closing at Rs.160 per share, while during the week it traded at a peak price of Rs.165 per share and a low of Rs.145 per share. A total of 2.7 million shares of JKH traded for the week.

Meanwhile it was reported this week that Rusi Captain the largest single shareholder of JKH, was granted a Board Seat.

SLT saw its share price rise to touch a high of Rs.41.50 per share amid a corporate announcement that NTT Communications Corporation, the second largest shareholder of SLT were in discussion with Global Telecommunications Holdings N.V. on a possible sell down of part of their holding in SLT.

However while prices picked up on the initial hype, it did not retain with the counter closing the week at Rs.38.50 per share, nevertheless remaining 4.5% higher than last week’s close. Contribution towards turnover from the counter amounted to Rs.290 million, while 7.3 million shares traded for the week.

Commercial bank was yet another counter, which saw added interest with 688,700 shares of the bank trading this week. The major part of 608,000 shares traded on Rs.133.9 million. Week on Week (WoW) the share price however showed little movement closing the week at Rs.220 per share.

During the week the counter was seen trading within a range of Rs.222.25 and Rs.218 per share, with contribution towards weekly turnover totaling Rs.151.6 million.

Insurance giant Ceylinco was also in investor appetite this week with the week seeing 505,000 of its shares trading.

The share price appreciated by 4.4% closing on Friday at Rs.207.75 per share, while price touched a high of Rs.210 per share for the week.

The major part of 343,100 shares traded on Thursday contributing Rs.74.3 million towards the day’s turnover, while the total contribution towards the week’s turnover amounted to Rs.107.2 million.

ACL saw its share price shoot up to Rs.162 per share this week amid the announcement of a 1 for 1 bonus issue on Tuesday. However prices retracted somewhat during the week with the share closing on Friday at Rs.153.25 per

share. Approximately 0.4 million ACL shares traded this week, contributing Rs.75 million towards weekly turnover.

Subsidiary company Kelani Cables too saw prices picking by 6.2% this week as the company declared a similar 1 for 1 bonus issue this week.

Carsons was the top gainer for the week with its share price rising by 104.8% to close at Rs.3762.50 per share on Friday. The spike in the share price came in the back of a 5:1 bonus issue being announced by the company on Thursday.

The counter touched a peak of Rs.5000 per share in reaction to the announcement, however prices simmered down subsequently.

The week started with relatively low activity levels, however picked up considerably during the latter part of the week Total weekly turnover stood at Rs.2 billion this week, down 20% compared to what was posted last week.

The average daily turnover stood at Rs.401.1 million for the week.

Furthermore the foreign participation that stood high at 56.5% last week due to the couple of big foreign to foreign transactions dropped substantially to 22.98% of total activity this week.

Foreign sales remained higher this week at Rs.654.40 million, when compared to foreign purchases, which totalled Rs.267.20 million this week. The resultant net foreign out flow amounted to Rs.387.2 million for the week. Heavily traded stocks this week, in terms of volume were; Colombo Land, SLT, Nawaloka, Dialog and JKH.

Market managed to rebound after 3 weeks of heavy losses where the market shed approximately 8% of its value.

During this week the All Share Price Index (ASPI) and Milanka Price Index (MPI) gained 4.89% and 3.62% respectively. However the activity levels did not pick up to the expected levels as most investors acted cautiously after the recent losses.

We expect the indices to remain volatile in the coming week, with the overall trend still pointing upwards.

During the coming week we expect the indices to fluctuate within a wide range with investors preferring to take trading positions, and this we believe would result in a boost in activity levels compared to last week.

Furthermore, considerable volatility might be seen within the same day, providing trading opportunities. We advice investors take short term trading opportunities while accumulating fundamentally strong counters with long term potential.

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