Indices reach six-month high

Market opened on a positive note this week and remained bullish with the indices touching a new high for 2009 on improved activity. Investors continued to pick undervalued blue chip counters, pushing indices to the highest close since November 2008. The ASPI (All Share Price Index) closed the week at 1896.0 points improved by a notable 57.6 points or 3.1 percent compared to the last week, while the MPI (Milanka Price Index) was up by 98.3 points or 5.0 per cent to close at 2061.4 points.

JKH remained the hot pick this week as the counter traded 4.0 million shares, adding closer to 25 per cent or Rs.306.1 million towards week’s turnover amidst a string of crossings. JKH saw its share price rise by 8.3 percent during the week, to close at Rs.78.00 per share, while trading at a high of Rs.78.75 and a low of Rs.72.50 per share.

Following closely was the banking counter, NDB, the second highest contributor towards turnover this week amounting to Rs.292.6 million. NDB too witnessed a number of crossings taking place during the week with bulk arising on Tuesday.

The share price ended flat WoW to close on Friday at Rs.93.00 per share. During the week the counter was seen trading at a low of Rs.91.00 per share and a high of Rs.97.00 per share. Approximately 3.2 million shares of NDB traded this week. Together with blue chip JKH, NDB accounted for 48.7 percent of this week’s market turnover.

Notable quantities of Ceylon Tobacco shares were seen trading this week, with the most part being traded on Tuesday and Wednesday. The share contributed Rs.51.2 million towards turnover, becoming the third highest contributor towards total turnover for the week. The counter traded within a wide range of Rs.115.00 and Rs.123.00 per share to close the week at Rs.116.00 per share, up by 0.9 per cent WoW while trading 0.4 million shares.

By week’s close on Friday, Chevron shares were up 1.7 percent, on a volume of 0.4 million shares. The lowest traded price for Chevron during the week was Rs.116.00 per share, while the highest traded price stood at Rs.118.25 per share, while the counter contributed Rs.48.8 million towards week’s turnover.

The market saw high activity this week with the total turnover increasing by 145.3 percent compared to previous week to Rs.1.2 billion. The improvement in activity was helped largely by JKH and NDB crossings while retail participation also stood healthy. Meanwhile the average daily turnover amounted to Rs.307.2 million for the week.

The most traded stocks during the week apart from the most sought after stocks JKH and NDB were Piramal Glass, Reefcomber, Dialog and Cargills.

Point of View

Positive trend to continue:

As expected by us, the market gained further during the week as investors continued to pick undervalued stocks. During the week All Share Price Index (ASPI) gained by 3.1 per cent on improved activity levels.

We do not expect a major shift in the market sentiment over the coming week, thus the overall trend is likely to remain positive. However we feel some investors would look to take profits after weeks of healthy gains causing volatility in indices. Furthermore the activity levels could improve further next week as more investors look to enter the market in the back of falling interest rates

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.

All opinions, views, findings and conclusions included in this report constitute ASB’s judgment of this date and are subject to change without notice. ASB has the sole copyright for this report and the information and views contained cannot be reproduced or quoted in part or whole in any form whatsoever without the written permission from ASB.