Increased investor appetite witnessed

The market could not retain the positive momentum it gathered last week as selling pressure on some of the heavyweight stocks dragged indices down.

Week started on a positive note on Monday, but the momentum reversed during the remaining three days of trading. Week on Week (WoW) the ASPI (All Share Price Index) lost 13 points or 0.54% to stand at 2412.4 points while the more liquid MPI (Milanka Price Index) ended down by 39 points or 1.34% to close the week at 2881.9 points.

Dominating market activity this week was Lanka Ceramic, supported by a transaction consisting of 7.46 million shares on Tuesday. The trade went through at a price of Rs.47 per share contributing Rs.351 million towards weekly turnover.

During the week a total of 7.48 million Lanka Ceramic shares traded, adding Rs.351.7 million towards the weekly turnover. Nevertheless the share price of Lanka Ceramic slipped 10.1% during the week to close at Rs.49.50 per share on Friday.

Contributing Rs.80 million, towards the weekly turnover was the blue-chip JKH, which gained a lot of investor attention on Wednesday. The counter traded at a highest price of Rs.109.50 and a lowest of Rs.104.25 during the week, while closing the week Rs.2.75 or 2.63% down WoW at Rs.104.50 per share. Total volume traded of JKH during the week amounted to 0.75 million.

E.B Creasy became the 3rd highest contributor towards the weekly turnover with counter ending the week with slight gains. The E.B Creasy share price edged up Rs.15 or 5.45% over the week, to close at Rs.275 per share at week’s close. The counter added up a total of Rs.54.2 million to the week’s turnover, after trading a share volume of 0.2 million during the week.

Meanwhile increased investor appetite was witnessed on AMW with the counter appreciating by 3.25% for the week to close at Rs.169.25 per share on Friday. During the week almost 0.3 million shares traded generating a turnover of Rs.51.5 million with share price touching a highest of Rs.177 and a lowest of Rs.164.

Apart from the Rs.351 million transaction on Lanka Ceramics on Tuesday, the activity levels remained relatively low during the 4 day trading week. The week’s total turnover this week stood at Rs.899.8 million, showing a significant 54% dip compared to last week’s Rs.2.0 billion. The average daily turnover fell sharply by 43% to stand at Rs.225.0 for the week.

Foreign investors were net buyers this week amounting to Rs.25.8 million, with foreign purchases standing higher at Rs.125.9 million (Up 14%) while foreign sales totalled to Rs.100.1 million (Up 38.8%). Foreign participation improved to stand at 12.6% this week compared to last week’s 4.6%.

Volume wise highest traded stocks during the week were Lanka Ceramic, Vallibel, Nawaloka and Tess Agro.

Indices failed to maintain the positive momentum as selling pressure pushed market into negative territory. During the week All Share Price Index (ASPI) lost 13.0 points while Milanka Price Index (MPI) slipped 39.1 points compared to last week’s closing levels.

We expect the sentiment to remain negative in the coming week amidst cautious approach by the investors. However we anticipate an improvement in activity levels with more retail participation, as Janashakthi Insurance Company (JINS) is expected to make its debut in the Colombo Stock Exchange (CSE) on Monday (21st of July). Thus we advise investors to keep a close eye on the insurance sector counters, as JINS debut is likely to attract more investors towards these stocks in the coming week.

Despite some improvement in exports growth, trade deficit widened further during the month of May due to continued pressure from higher petroleum imports.

Total export earnings witnessed a noteworthy 17.0% YoY increase in May to US$745.9 million. Industrial exports which constitute the major part of total exports grew by 17.1% YoY to US$597.8 million.

Furthermore the agricultural exports expanded by a healthy 25.4% YoY mainly backed by the significant increase in earnings from Tea. Export earnings from Tea in the month of May grew by a notable 30.1% YoY to US$ 96.4 million.

Meanwhile total imports in May amounted to US$1.26 billion, showing a 24.2% increase compared to the corresponding month of previous year. Yet petroleum exports dominated import expenditure with a significant 73.6% YoY increase to Rs. 337.2 million on the back of surging oil prices.

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