Indices slip

As investors pause after a five-week rally:

The market witnessed a slight technical correction last week as investors booked profits on the recent market rally that pushed up the ASPI by 17.5 percent over the previous five weeks.

Week-on-Week the indices closed down with benchmark ASPI (All Share Price Index) declining by 47.4 points or 1.6 percent to 2892.1 points while the liquid MPI (Milanka Price Index) lost 26.2 points or 0.8 percent to close at 3267.3 points.

JKH dominated the market last week in terms of turnover with high volumes changing hands during the first two days of the week.

The counter became the fifth highest traded stock with a total volume of 4.8 million shares, while injecting Rs. 744.8 million to week's turnover.

Week on week the share price dipped slightly by 1.5 percent to close at Rs. 152.75 per share after trading within a range of Rs. 152.25 and Rs. 155.50 per share over the week. Banking counter, Seylan Bank (Non Voting) was the second highest contributor towards turnover last week amounting to Rs. 156.0 million.

The counter gained investor attention on the back of Seylan Bank's public issue of ordinary voting shares that opened for subscription on Tuesday.

During the week SEYB (Non Voting) was seen trading at a low of Rs.11.50 per share and a high of Rs. 13.50 per share. Approximately 12.3 million shares changed hands during the week.

With 22.6 million shares, Dialog became the highest traded stock during the week while contributing Rs. 138.6 million to the week's turnover. Dialog meanwhile saw its price moving up by 8.3 percent WoW to close at Rs. 6.50 per share.

Investor attention towards Browns (BRWN) continued for yet another week with share price gaining 11.4 percent to close on Friday at Rs. 61.00 per share.

During the week the counter was seen trading between the range of Rs. 56.75 and Rs. 64.50 per share while becoming the fourth highest contributor towards weekly turnover, injecting Rs. 113.1 million. Total turnover amounted to Rs. 2.8 billion this week, while the average daily turnover stood at Rs. 692.7 million.

Tuesday posted the highest daily turnover for the week amounting to Rs. 1.1 billion driven by the Rs. 483.3 million contribution by JKH, while daily turnover levels gradually fell towards the end of the holiday shortened four-day week.

Week on Week (WoW) the market turnover was down by 52.7 percent.

Foreign participation improved further last week to stand at 30.2 percent of total activity compared to 27.1 percent posted previous week.

Foreign purchases stood at Rs.943.1 million, while foreign sales totaled to Rs.731.1 million resulting in a net foreign inflow of Rs. 212 million.

Among the highest traded stocks in terms of volume for the week were Dialog, Seylan Bank (Non Voting), Piramal Glass, Vallibel and JKH.

Point of View:

Volatility to continue for another week

The market as we expected saw a slight correction last week as investors opted to book in profits following an unbroken rally witnessed over the previous five weeks. Week-on-Week ASPI lost 1.6 percent while the MPI declined by 0.8 percent with the activity levels remaining relatively low compared to last few weeks.

While the strong sentiment is likely to hold, profit taking we believe can continue for another week. However as pointed out bargain hunters are likely to create buying interest on fundamentally sound counters providing resistance to any sharp downward trend. Thus, considering the expected volatility in indices, we advise the investors to actively look for trading opportunities in the market.

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