Bartleet weekly Market report

Progress in achieving peace stimulates investor sentiments

With the victories in north, the sentiments of investors are toning up for a future political stability in the Country.

Hotels, Construction and Property sectors of CSE are highly correlated with the on going war and have the possibility of gaining dramatically in favourable circumstances.

This was clearly witnessed during this week with heightened interest on leisure and property counters. Overall All Share Price Index (ASPI) advanced 59.43 points (3.37%) WoW to close at 1821.24 and Milanka

Price Index (MPI) gained 35.23 Points (1.83%) WoW to quit at 1964.98.

The Monday's rally on Seylan Bank (SEYB) counters did not last too long with Sampath Bank (SAMP) and Lanka Orix Leasing (LOLC) denying the validity of article on acquiring SEYB stake published in Sunday Financial Times. However the week saw 0.64Mn voting shares and 4.10Mn non voting shares changing hands to post a collective turnover of Rs.57Mn.

Heavy interest was seen on Lanka Cement (LCEM) on the back of announcement regarding proposed plans to increasing capacity.

Accordingly the news on increasing cement imports from Pakistan to cater to the increased demand in developing cleared areas in Northern and Eastern provinces coupled with possibilities of reviving the abandoned cement factory in Kankasanthurai triggered the boost in trading. For the week counter switched 6.22Mn shares and contributed Rs.77.55Mn turnover. Shares of John Keells Holdings (JKH), Cargills (CARG) and Asian Hotels and Properties (AHPL) saw crossings for the week.

The block deal on JKH amounted to 0.15Mn shares and changed hands at a price of Rs.70.00.

A total of 1.31Mn JKH shares traded during the week to post the week's highest contribution of Rs.91.71Mn to turnover. Meanwhile CARG crossing comprised of 0.50Mn shares changing hands at Rs.28.00.

As a result the counter accumulated a sum of 1.08Mn shares for the week and contributed Rs.30.18Mn to turnover.

Further AHPL witnessed a pile of 0.50Mn shares swapping in the counter at a price of Rs.32.00. For the week AHPL traded 1.96Mn shares and posted Rs.62.14Mn to turnover. DIAL topped volume wise for the week with 12.03Mn shares while other heavily traded stocks include OSEA with 3.40Mn shares, - SIRA with 2.10Mn shares, LITE with 2.08Mn Shares and NHL With 1.57Mn shares.

Turnover for the week registered at Rs.948.50Mn reflecting a daily average of Rs.189.70Mn. The other highest contributors for the week include CINS with Rs.39.71Mn, OSEA with Rs.32.18Mn, COMB with Rs.30.63Mn and DIST with Rs.28.04Mn.

Foreigners were more prominent on the selling side bringing a net weekly outflow of Rs.85.51Mn.

The rapid progress seen in the war front is expected to change the investor sentiment and will no doubt attract both retail and institutional investors who remain on side lines for a longer period of time.

Hence BMS Research Believes that there will be a significant boost in the level of activity invariably lifting the ASPI to cross 2000 mark during the month of February. We foresee renewed buying interest on Hotels & Travel sector in the near terms and selective buying interest on other counters based on the performance for the period ending December 2008.

For the nine months ended 31.12.2008 the group posted a profit of Rs.2.6 billion, a decrease of 19% over the corresponding period in the previous year and for the 3rd quarter alone the profit declined 44% to Rs.765 million.