Foreign participation slightly up

STOCK MARKET: The fall in the market was yet again witnessed this week with the two indices reaching its lowest for the year. During the first three days ASPI (All Share Price Index) fell by 52.11 points while MPI (Milanka Price Index) had a bigger fall of 78.08 points.

On Thursday the market picked up slightly but once again dropped on Friday closing the week at the year’s lowest for ASPI and MPI of 2463.9 and 3400.9 points respectively. Overall the two indices dropped by 2.38% and 2.87% respectively, compared to last week’s closing levels.

Singer Sri Lanka emerged as the highest contributor to the total market turnover with a contribution of Rs. 96.24 million.

The counter witnessed an improvement in its share price, which went on to the peak at Rs. 69 per share before closing at Rs. 68 for the week.

The share also saw an appreciation in its stock price of 1.87% relatively to last week’s closing price of Rs. 66.75.

Ceylinco Insurance ranked number two in its contribution to total market turnover with a value of Rs. 79.33 million, which traded between the prices of Rs. 170 and Rs. 185.The share price saw a drop of 3.33% relative to its opening price.

With much talk on SLT, the counter met with some serious issues on its share price with a 10.42% decline over the week.

On Monday the Supreme Court ordered SLT to reduce its call charges and rental with effect from January 2007. With the anticipated rate revision we have adjusted our earnings forecast for SLT in FY 2008 to Rs. 6.48 billion from Rs. 7.68 billion.

The counter opened up with Rs. 36 per share before winding up at Rs. 32.25. Turnover for the stock was Rs. 52.59 million, which is 9% of the total market turnover for the week.

The top position again slipped away from JKH, which it managed to gain last week. The contribution from JKH to this week’s market turnover amounted to Rs. 16.73 million, 2.87% of the total market turnover.

It touched a high of Rs. 143.25 per share and a low of Rs. 138. JKH is another stock which saw negative price change from last week’s closing prices where the stock closed this week at Rs. 138 down by 4.16%.

The market could not seem to get away from relatively low activity level as the week started with a significantly low turnover of Rs. 47.5 million on Monday.

The total turnover for the week stood at just Rs. 583.5 million; down 3.1% compared to last week while the daily average turnover indicates a marginal drop of Rs. 3.78 to close the week at Rs. 116.7 million.

Foreign participation was slightly up this week amounting to 35.12% compared to last week’s 32.5% leading to a slight increase in net foreign inflow by just Rs. 4.5 million, closing the week at Rs. 314.50 million with foreigners continuing to remain net buyers for the week.

Elpitiya, Lanka Ashok, Regnis, James Finlay and Biraha Farms were among the highest traded stocks for the week.

Indices moved further towards negative territory as vulnerable macro environment continued to hurt the investor sentiment. Overall the market lost 60 points during the week compared to last week’s closing levels.

We expect the market sentiment to remain negative on thin volumes until such time a positive news emanate from the peace front.

Thus we advice investors with short term investment horizons to be in cash to capitalize on possible trading opportunities in the market place while advising investors with a medium to long term investment horizon to stick to fundamentally sound counters in the Banking, telecom and conglomerate sectors which are currently trading at attractive levels.

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