Investors remain cautious

Market remained dull during the week, with activity levels further drying out, as investors opted to remain watchful. The indices continued with the downward trend from last week, remaining in red during the first three days before regaining some lost ground on Friday. Week on Week (WoW) the ASPI (All Share Price Index) declined by 1.5 percent or 36.8 points to close the week at 2363.1 points, while the MPI (Milanka Price Index) came down by 2.0 percent or 54.5 points to close at 2640.7 points.

Although interest on blue-chip counters such as JKH and NDB continued for yet another week, the trading volumes were the lowest compared to previous weeks.

JKH, which became the weeks' highest contributed stock with Rs.109.8 million, lost 3.9 percent to close down at Rs.128.00 per share. Total volume traded of JKH during the week amounted to 0.8 million. Meanwhile 0.7 million shares of NDB were seeing changing hands during the week, adding Rs.103.4 million towards the weeks' market turnover. Nevertheless share price of NDB edged down 3.0 percent WoW to close at Rs.155.00 per share.

Speculative stock, Lanka Cement (LCEM) was also among the top contributors for the week, with the counter generating a turnover of Rs.26.9 million towards the week's market activity. Lanka Cement share touched a highest price of Rs.26.00 during the week while closing 3 percent up at Rs.25.75 per share. During the week a total volume of 1.1 million LCEM shares exchanged hands.

Vallibel became the week's most traded stock with 7.3 million shares trading for the week with bulk of the activity taking place on Thursday. The share managed a turnover of Rs.25.2 million, whilst trading between a price range of Rs.3.60 and Rs.3.20 per share during the week before closing 3.0 percent up at Rs.3.40 per share on Friday.

Lack of participation of both local and foreign investors lead to low activity during the week. Turnover during the holiday shortened four day week stood low at Rs.710.3 million, witnessing a 64.7 percent decline from last week while average daily turnover resulted in a 55.9 percent drop to Rs.177.6 million.

Foreign participation levels once again fell to 23.6 percent this week, compared to 26.8 percent recorded during last week. Foreign investors were net buyers for the week amounting to Rs.127.7 million, with foreign purchases totaling Rs.231.7 million and foreign sales standing at Rs.104.0 million.

Volumewise the highest traded stocks during the week were Vallibel, Sierra Cables, Dialog and Seylan Merchant Bank (Non Voting). Highly traded stocks during the week were Seylan Merchant, Sierra Cables, Seylan Merchant (Non Voting) and The Finance.

Point of View Volatility to continue

The negative trend continued on thin activity levels, as investors remained cautious during the week. The All Share Price Index (ASPI) lost 1.5 percent compared to last week's closing levels.

The market is likely to remain volatile during the coming week, as bargain hunters would look to capitalize on the opportunities with the fall in the stock prices over the last two weeks.

Therefore we advise investors to look for trading opportunities while continuing to pick fundamentally sound stocks at attractive price levels. 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 judgement of this date and are subject to change without notice.

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