Market report
 

Activity levels improve as investors watch corporate earnings

The market ended modestly low for the week with the stocks confined to a narrow trading range throughout the week. However activity levels improved over the week with more investors coming into the market during the corporate earnings season.

Comparing Week on Week (WoW) the ASPI (All Share Price Index) declined by a slight 0.28% or 6.8 points to close the week at 2466.6 points, while the MPI (Milanka Price Index) edged down by 0.74% or 21.8 points to close at 2931.7 points.

Biggest contribution towards the week’s turnover came from Richard Pieris, which witnessed a considerable stake changing hands on Thursday. According to media reports the Arisag Indian Fund sold its 11.6% stake in Richard Pieris at a price of Rs.35.00 per share.

The strategic transaction reportedly consisted of 14.8 million shares while in total the counter traded a volume of 16.4 million shares for the week, contributing Rs.578.2 million towards market turnover.

The share meanwhile edged down 5.1% WoW to close at Rs.41.75 per share.

The high cap JKH saw its share price rising by a sizable 6.2% this week closing at Rs.106.50 per share.

The counter was seen trading at a high of Rs.106.50 per share and a low of Rs.101.00 per share during the week, with around 4.5 million shares switching hands. The contribution towards weekly turnover amounted Rs.465.8 million with the bulk coming on Friday in the form of a crossing.

The high cap Distilleries was also among the top contributors for the week, with the counter generating a turnover of Rs.244.4 million towards the week’ s market activity.

The Distilleries share price touched a highest price of Rs.89.50 during the week while closing 0.6% up at Rs.88.50 per share. The counter traded a total volume of 2.8 million shares for the week.

Renewed interest was seen on Ceylinco Insurance shares this week. Ceylinco Insurance share price dipped by 1.4% to close at Rs.216 per share after reaching a highest price of Rs.220 for the week.

Around 0.52 million of its shares traded for the week contributing Rs.113.0 million towards weekly turnover.

Meanwhile total turnover for the week amounted to 2.5 billion up by 22.4% WoW after excluding the strategic transaction on AMW, which constituted bulk of the market turnover last week.

The daily average turnover stood at Rs.507.4 million, compared to Rs.414.6 million recorded during last week.

Foreign participation remained high this week amounting to 57.0% of total activity compared to 45.1% posted during last week. Foreign purchases for the week amounted to Rs.1.5 billion declining by 80.3% compared to last week, while foreign sales witnessed a sizable 407.2% increase this week to total to Rs.1.3 billion, resulting in a net inflow of Rs.189.8 million.

The most actively traded stocks for the week were Richard Pieris, Vallibel, Seylan Merchant (Non Voting) and Lanka IOC.

Corporate earnings likely to be mixed

As expected by us last week the activity levels picked up with more investors coming into the market during the corporate earnings season.

Overall during the week the All Share Price Index (ASPI) lost 6.8 points during the week while the more liquid Milanka Price Index (MPI) shed 21.8 points compared to last Friday’s closing levels.

We expect the corporate earnings to remain mixed with sectors such as plantations gaining more investor interest. Furthermore in our opinion the financial performance of most the companies during the second quarter of 2008 is likely to come under pressure in the back of high inflation, interest rates and high energy related costs.

Nevertheless we expect trading opportunities to prevail in the market place amidst likely volatility in indices.

Thus we advise investors to focus on trading opportunities while accumulating stocks that have fallen to attractive price levels.

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.