Late recovery fails to cover lost ground in trading
ANALYSIS: The market started off on a negative note adding to
another week of sluggish performance but managed to pick up slightly
towards the latter part of the week.
During the first three days the ASPI shed 109 points, however the
momentum was slightly shifted during the latter part of trading on
Thursday reversing the direction of the market.
The buying on highly capitalised Dialog and SLT shares caused the
ASPI and MPI to move 29 points & 41 points upward during the last two
days.
During the week the ASPI dropped 3.25 % or 80 points to close at 2384
while the more liquid MPI closed 4.15 % or 141.3 points down to 3259.6
compared to previous week.
JKH managed to regain its lost position as the largest contributor to
the market turnover, which it lost to Singer Sri Lanka last week.
The counter lost 6.16% over the week to close at Rs.129.50 per share.
Out of the 34.8% or Rs.189 million contribution towards the market
turnover, bulk of the JKH turnover came on Friday amounting to Rs.166
million largely due to a foreign to foreign transaction.
Ranking in the second place is Nations Trust Bank witnessing
1,219,600 of its shares changing hands. The stock closed flat from last
week closing at Rs.30 managing to rise only up to Rs.30.50 during the
week’s trading.
Amid much speculation, the telecom giant SLT managed to secure its
place this week by contributing Rs.25.75 million to the total market
turnover. The counter saw a marginal 0.7% drop in its share price to
close at Rs.32.
Apart from JKH, NTB and SLT investor interest was also captured by
Distilleries, which contributed to 4.34% of the total market turnover.
Rs.6.5 or 7.26% decline was seen on its share price before winding up at
Rs. 83 per share this week.
The turnover for the week stood at Rs.543.10 million indicating a
moderate 6.9% drop compared to last week while the average daily
turnover amounted to Rs.108.6 million.
The turnover was skewed towards the last day of the week where 38.5%
or Rs.209.1 million came along on Friday.( JKH attributing to most part
of it)
Foreign participation remained higher this week amounting to 41.6% of
the total activity compared to last week’s foreign participation of
35.12%. This week too foreigners continued to be net buyers amounting to
Rs.20.4 million, however a significant decline of 93.5 % in net inflows
was witnessed as a result of low foreign purchases.
Foreign buying during this week was down 35% compared to last week to
stand at Rs.236 million while foreign sales jumped by 352 % to Rs.216
million.
The top traded stocks during the week included Ceylon glass, Seylan
(Non voting), JKH, Nations Trust and People’s merchant.
Point of View
Trading opportunities to remain amid volatility
Market continued to lost ground during the week despite a late
recovery during the latter part of the week. Furthermore the activity
levels dropped to Rs.108.6 million on a daily average basis as little
improvements were seen in the macro front.
Overall the All Share Price Index (ASPI) lost 80 points while the
liquid Milanka Price Index (MPI) lost 141 points during the week’s
trading.
Dull sentiment to continue
We expect the market to remain volatile during the next week
providing trading opportunities for investors in the market place.
However the directionless macro situation is likely to make investors
follow a ‘Wait and See’ strategy resulting in relatively low turnover
levels.
Furthermore the following key stocks under performed the market
(refer figure 1) during the last 4-5 months, thus we advice investors to
closely monitor these counters, as these are likely to gain the most in
the event of a market turnaround.
Key stocks that under performed the market since February 2007
Key stocks that under
performed the market since
February 2007
Performance since Feb 2007
Underperformance % ASPI -21.5
CEYLON INV -36.4%, -14.9%
LMF -36.5%, -15.0%
DISTILLERIES 1/- -35.3% -13.8%
PELWATTE -33.7% , -12.2%
LANKA IOC -32.6%, -11.1%
ROYAL CERAMIC -31.7%, -10.2%
CEYLON GUARDIAN -31.3%, -9.8%
HNB [NON VOT] -25.2%, -3.7%
SLT -25.0%, -3.5%
COMMERCIAL BANK
[NON VOT] -24.0%, -2.5%
Source: CSE
(This information has been compiled from sources
that we believe to be reliable but we do not hold ourselves responsible
for its completeness or accuracy. No matter published herein create any
liability of any kind of HNB Stockbrokers (Private) Limited or its
associates. All opinions views findings and conclusions included in this
report constitute our judgment of this date and are subject to change
without notice.) |