JKH grabs investor attention

Stocks at the Colombo bourse suffered another week of losses as the week saw more disappointing news on corporate earnings.

However burst of few large deals on the last trading day of the week boosted the turnover levels drastically. Week on Week (WoW) the ASPI (All Share Price Index) declined by 66.4 points or 3.9% to close at 1627.7 points, while the MPI (Milanka Price Index) dropped by 98.6 points or 5.6% to 1675.3 points at Friday’s close.

The highlight for the week was the transfer of the shareholding of four listed companies by Carsons Cumberbatch PLC to its fully owned regional plantation holding subsidiary Goodhope Asia Holdings Ltd on Friday, in line with its strategy to establish a stronger presence in the region.

The majority stakes transferred were Shalimar (75.0%), Selinsing (50.2%) Good Hope (53.9%) and Indo Malay (51.3%), with each adding Rs.2.3 billion million, Rs.515.3 million, Rs.497.8 million and Rs.460.6 million respectively towards week’s market turnover. Apart from the above mentioned group holdings a stake of Carson’s property subsidiary Equity One PLC was also transferred to Goodhope Asia Holdings Ltd. Contribution by the counter amounted to Rs.220.5 million with the share closing the week at Rs.19.00.

Nevertheless investor attention was largely centered on JKH share during the week with the counter recording the week’s sixth highest turnover of Rs.70.1 million. Consistent interest was seen on JKH during the week as a total of 1.2 million shares traded during the week.

However WoW the JKH share price witnessed a modest 5.0% drop to settle at Rs.57.00 per share by Friday, before trading at a high of Rs.60.00 and a low of Rs.55.25 per share.

Lanka Cement also witnessed 4.1 million of its shares trading during the week contributing Rs.40.4 million towards weekly turnover. The counter during the week traded within a wide margin of Rs.8.75 and Rs.13.25 while closing at Rs.9.75, down by a significant 26.4% compared to the previous week’s closing.

Although total market turnover saw a significant 482.8% increase from last week to amount to Rs.4.4 billion, the bulk of it is attributable to the major transfer deals of Carson Cumberbatch related companies. Meanwhile the daily average turnover stood at Rs.874.1 million with an increase of 366.2% compared to last week’s Rs.187.5 million.

Foreign investors for the week were net buyers with total net inflows standing significantly high at Rs.3.8 billion. The was due to the foreign buying associated with the above mentioned trades which as a result saw foreign purchases amounting to Rs.3.9 billion for the week. Meanwhile foreign sales for the week amounted to Rs.67.4 million. Out of the total activity, foreign participation was at 44.9% for the week.

Volume wise, the highest traded stocks during the week were Equity One, Shalimar, Seylan Merchant (Non Voting) and Lanka Cement.

As expected by us, the negative sentiment continued in the marketplace with both indices losing ground on thin activity levels. During the week, market lost 3.9% compared to previous week’s closing levels.

We feel volatility will return to the market place providing some trading opportunities for investors. Thus we advise investors to accumulate fundamentally sound counters while exploiting possible trading opportunities in the market.

The information contained herein has been compiled from sources that Acuity Stockbrokers (Private) Limited (ASB) believes to be true and reliable but we do not hold ourselves responsible for its completeness or accuracy. No matter published herein create any liability of any kind on ASB.

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