Last minute in trading market gains ground

A surge in prices of most of the high cap blue chip counters such as JKH, SLT, DIAL, HNB, DFCC etc. during the last 15 minutes of trading on Friday helped the market to end the week gaining some healthy ground.

Friday alone the ASPI (All Share Price Index) & MPI (Milanka Price Index) picked up by a substantial 44.58 and 92.29 points before closing the week at 2526.6 points and 3453 points respectively. Week on Week (WoW) basis the ASPI gained by 50.9 points (2.06%) and MPI rose by 102.2 points (3.05%).

Speculation that kept Asha Central Hospital on price hikes during last couple of weeks eventually came to an end this week with Asiri Hospital Group and Softlogic holding acquiring 81.56% of controlling interest in the counter on Thursday.

The controlling stake of the hospital changed hands at a price of Rs.98.75 triggering a mandatory offer.

This deal made the counter the highest contributor towards the weekly market turnover contributing Rs.1.8 billion. During the week 18.6 million shares of Asha Central traded within a price range of Rs.90 and Rs.98.75.

HNB contributed Rs.111.2 million towards the turnover, with the bulk of this amounting to Rs.108.5 million coming on Friday. During the week 1.13 million HNB shares traded at a highest price of Rs.102.50 and a lowest price of Rs.94.75 before closing the week at Rs.102, up by 7.36% on Friday.

In the third place was the hospital counter Nawaloka with a total contribution of Rs.60 million with around 21.9 million shares being traded over week’s trading. The counter saw its share trading within a price range of Rs.2.6 & 2.9 before ending at Rs.2.7 per share on Friday.

Also the telecommunication counter SLT contributed considerably to the weekly turnover amounting to Rs.46 million, with almost 1.37 million shares traded in volume. The share price witnessed an increase of 5.3% week on week to close at Rs.34.75 per share.

Despite trading being limited to 4 days this week, market turnover totaled to Rs.2.58 billion showing a 30.3% increase from last week’s Rs.1.98 billion largely due to the strategic trade on Asha Central Hospital.

The daily average turnover also showed an increase this week by 62.3% to stand at Rs.646.58 million compared to Rs.397.10 million last week. However the daily average turnover excluding the Asha trade showed a drop of 50.5 % compared to the previous week.

A net foreign inflow of Rs.217.32 million was recorded for the week, with foreign purchases standing at Rs.269.4 million down by 72.3% while foreign sales amounted to Rs.52.08 million down 71.4% from last week. Meanwhile foreign participation was down significantly to 6.22% of total activity.

Among the heavily traded stocks this week were Nawaloka, Asha Central, Galadari, Vanik and SLT.

Market went in to a dull mode again this week until a late rally on Friday.

The retailers continued to show interest on relatively low value counters focusing mainly on day trading opportunities. On Friday market closed at 2526.6 points up 2.06% compared to last week’s closing levels.

Market is likely to be volatile during the coming week with retail investors expected to show interest on low value counters.

Furthermore in the week ahead we expect activity levels to somewhat improve compared this week’s relatively low levels (excluding Asha Central’s 81% stake which changed hands during the week). Thus considering the likely market volatility we advise investors to focus on trading opportunities during.

The price levels declined marginally in August over July, keeping in line with the seasonal pattern usually observed for this month.

The August Colombo Consumer Price Index (CCPI) stood at 5453.2 points down by 43.3 points compared to July CCPI resulting in a slowdown in the Point to Point inflation to 17.3% compared to 17.6% recorded one month ago.

However the annual average CCPI continued to move up to stand at 17.3% in August compared to 17.2% in the previous month. The decline in the CCPI during August compared to last month was mainly due to the price decrease in Food category, which has the highest weightings.

The prices of key food items such as vegetables, fish, dried fish and potatoes declined in the back of higher supply of locally produced agriculture products.

However other sub indices (Fuel & Light, Clothing, Miscellaneous) were seen rising during the period under review.

In September 2007 we expect the annual average inflation to further go up backed by higher expected food prices. Thus according to our projections the inflation (annual average) in September is expected to stand at 17.5%.

“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. All opinions views findings and conclusions included in this report constitute our judgment of this date and are subject to change without notice.