Total market activity rises

Investor sentiment got a boost as the week ended with substantially high gains, making CSE the best performing market so far in 2009. The bourse jumped to a 2 month high on Tuesday helped by greatly improved market sentiment, fuelled by a strong rally across the bourse driven by retail interest.

However profit taking on Wednesday saw indices taking a beating, nevertheless resumed its upward trend on the remaining 2 days of the week.

The ASPI (All Share Price Index) was up almost 111.9 points or 6.8% to 1761.8 points while the MPI (Milanka Price Index) closed 158.2 points or 8.9% stronger at 1929.8 points.

The blue chip JKH recorded the highest turnover for the week, which amounted to Rs.173.5 million, while trading 2.5 million shares for the week. Interest on JKH was witnessed throughout the week along with the sudden boom in market sentiment.

Investor interest

The JKH share continued its upturn right throughout the week gaining 5.7% to close the week at Rs.69.25 per share. JKH alone represented 20% of the total week’s turnover with majority of it arising on Monday.

Possible divestment by the existing major shareholder kept investor interest on Seylan (Non Voting) during the week.

The counter posted the week’s second largest turnover of Rs.79.9 million while trading 12.5 million of its shares during the week. The counter observed a 12.5% price increase for this week to close at Rs.6.75 at Friday’s close before fluctuating between a price range of Rs.6.00 and Rs.7.00 per share.

Renewed interest was witnessed on the banking giant Commercial, which traded 0.3 shares over the week generating a turnover of Rs.30.5 million. The Commercial share gained substantial 23.5% during the week to close at Rs.92.00.

Share Prices Healthy

Meanwhile, the Seylan (Voting) too saw 0.7 million shares changing hands for the week with its share price showing a healthy 26.1% appreciation to close the week at Rs.43.50 per share.

The stock during the week traded at a highest price of Rs.45.00 and a lowest of Rs.34.00 per share. Seylan’s (Voting) contribution towards the weekly turnover amounted to Rs.26.4 million. Total market activity for the week rose by a notable 112.8% to Rs.868 million with turnover more skewed towards early part of the week.

The retail investors were seen active in the marketplace, however institutions opted to remain in the sidelines. The average daily turnover during the week meanwhile amounted to Rs.173.6 million.

Foreign purchases stood at Rs.142.0 million for the week while foreign sales totalled to Rs.169.7 million resulting in a net outflow of Rs.27.7 million for the week. Comparing WoW, foreign purchases and sales were up by 260.4% and 179.1% respectively. Foreign participation this week stood at 18% of total activity.

Volume wise, the highest traded stocks during the week were Seylan Bank.

However the active retail participation pushed indices higher with improved activity levels. During the week market gained 6.8% compared to previous week’s closing levels. We expect the volatility to continue in the coming week, as retail investors are likely to focus on a trading strategy.

Military Win Expected

However we feel the valuations of certain selected fundamentally sound stocks look attractive, thus we advise investors to collect these stocks with a medium to long term view as military victories expected and the decline in the short term rates are likely to strengthen the market sentiment over the coming weeks.

“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.”