Indices further falls

Market plunged further this week as negative investor sentiment continued to push indices further into the red zone. Market experienced sharp falls during early part of the week, however managed to recover some lost ground on Thursday and Friday.

Overall the ASPI (All Share Price Index) edged down for the week losing 53.5 points or 2.42% at 2155.5 points while the liquid MPI (Milanka Price Index) fell by 67.3 points or 2.71% to close the week at 2416.9 points.

John Keells Holdings (JKH) managed to attract investor attention for yet another week, with the stock generating a turnover of Rs.42.4 million during the four days of trading. In total 0.5 million JKH stocks changed hands, standing moderately below the 0.6 million traded last week. JKH’s share price during the week picked up marginally by 0.3% WoW (Week on Week) to close at Rs.86.50 per share, while the counter traded between a price band of Rs.85 and Rs.88 per share.

AMW was the second largest turnover generator with its contribution amounting to Rs.39 million during the week. Week saw 0.2 million shares trading with the buying party is believed to be the Al Futtaim Engineering LLC. AMW share price remained flat at Rs.174.50 per share throughout week’s trading.

Meanwhile Distilleries saw 0.5 million of its shares trading for the week contributing Rs.37.3 million towards the weekly market turnover. The counter traded between a broad price range of Rs.68.25 and Rs.75.00 per share, before closing down 1.4% WoW to close at Rs.71 on Friday.

Emerging, as the highest traded stock during the week, backed by renewed investor interest was Piramal Glass with the counter contributing Rs.30.8 million to the week’s turnover. Week saw over 14.7 million Glass shares trading for the week, with the majority portion being traded on Thursday.

During the week the counter traded at a highest price of Rs.2.20 and a lowest Price of Rs.2.00 while closing on Friday at Rs.2.10, down by 4.6% WoW. Total trading activity during the four day trading week showed an 18.6% decline to stand at Rs.424 million.

Nevertheless the average daily turnover improved slightly by 1.7% to stand at Rs.106 million for the week compared to last week’s Rs.104.2.

Foreign participation of total activity stood considerably higher this week to stand at 28% compared to 12% last week. Foreign purchases during the week increased by 92.3% to Rs.159 million while foreign sales totaled to Rs.78.2 million, up 86.2% compared to levels recorded last week. Higher foreign buying resulted in a net foreign inflow amounting to Rs.80.8 million for the week.

The most actively traded stocks during the week were Piramal Glass, Tess Agro, Sierra Cables and Vallibel.

Negative sentiment likely to prevail

Market continued on its bearish trend as we anticipated amidst extremely cautious approach adopted by the investor community. Overall the market shed 53.5 points during the week on very low activity levels.

In the coming week we expect the market to remain on its negative trend, as we do not anticipate investors to aggressively pick up stocks despite the recent market fall.

Inflation slows down for a third month in a row. As measured by the benchmark inflation index CCPI-N, the consumer prices in Sri Lanka gained by 24.3% YoY during the 12-months ended September 2008. According to data published by the Census and Statistics Department food prices eased further during the month of September leading to third straight monthly slowdown in inflation following the record 28.2% posted in June.

However annual average inflation continues with its upward trend and by the end of September stood at 23.2%.

Considering the global crude oil prices which have now fallen below $100 per barrel, we believe a possible downward fuel price revision could further ease off price pressures within the economy.

“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.