Stocks surge to all-time high
The market which remained volatile during the first three trading
sessions of the week rapidly gained momentum with the start of the new
month.
On Friday the CSE created history as the ASPI reached its all time
closing high of 3018.0 points, against the previous high of 3016.4
points recorded on February 13, 2007. Week-on-Week ASPI gained by 126.0
points or 4.4 percent to close at 3018.0 points while the more sensitive
Milanka Price Index (MPI) climbed up by 127.5 points or 3.9 percent to
close the week at 3394.9 points.
Seemingly underlying interest on Seylan Bank (SEYB) Non Voting
counter propelled it to become the largest contributor to turnover
during last week, amid an oversubscribed public issue of SEYB voting
shares.
The counter also became the highest traded stock for the week, while
its share price appreciated by a notable 24.5 percent WoW, to close at
Rs.16.50 per share on Friday.
Total number of Non Voting shares traded amounted to 50.7 million,
accounting for a contribution of Rs.780.0 million during the week.
Meanwhile the Seylan Bank Voting share recorded a turnover of
Rs.115.4 million, becoming the 5th highest contributor. The share
witnessed a 7.4 percent improvement in price to close at Rs.36.50 per
share on Friday.
The two conglomerates JKH and Aitken Spence were next in line,
injecting Rs.313.8 million and Rs.151.1 million respectively towards the
week’s turnover. Both shares recorded marginal gains during the week
with JKH increasing by 0.8 percent to close at Rs.154.00 and Aitken
Spence gaining 0.7 percent to close at Rs.891.25.
Coco Lanka share surged 39.1 percent or Rs.12.50 WoW to close at
Rs.44.50 per share, whilst trading a volume of 3.4 million shares for
the week within n a price range of Rs.32.25 and Rs.46.50 per share
during the week.
The stock, with a total turnover of Rs.138.5 million became the
fourth largest contributor for the week.
Turnover picked up last week to Rs.4.5 billion up by a notable 62.7
percent with activity being helped largely by Seylan Bank transactions.
The largest portion to week’s turnover came during the last two
trading sessions of the week. Meanwhile the average daily turnover
amounted to Rs.901.5 million.
While activity increased, foreign participation levels declined to
16.2 percent of total activity this week, compared to 30.2 percent
posted during last week. Foreign purchases fell to Rs.725.3 million
while foreign sales remained stagnant at Rs.731.9 million, resulting in
a marginal net foreign outflow of Rs.6.6 million for the week.
Among the heavily traded stocks during the week were Seylan Bank (Non
Voting), Seylan Merchant (Non Voting), Colombo Land and Tess Agro.
Point of View
Sentiment to remain strong; hunt for attractive valuations
Market which remained volatile during the first three trading
sessions of the week, rapidly gained momentum with the start of the new
month to close the week at a historic high. Week-on-Week the ASPI gained
4.4 percent while the MPI rose by 3.9 percent with improved activity
levels compared to last week.
Bullish sentiment we believe is likely to continue in the market,
thus further gains in indices can be expected over this week.
The shift in investments from fixed income securities to equities on
the back of falling interest rates, expectations of improved foreign
buying and the anticipated economic rebound in the last quarter are the
key drivers of the market at present.
Meanwhile, the investors who have been accumulating from lower price
levels may look for sporadic profit taking in the event of market
climbing faster than it warrants.
However, this is unlikely to affect the overall trend of the market
in any major way as the investors with confidence over the long term
outlook will provide sufficient support for fundamentally strong
counters.
Furthermore, while the market has gained over 100 percent
year-to-date, there remain a number of counters which have lagged the
rapid rise of the market and still trading at attractive valuations.
Hence we advise the investors to hunt for counters with attractive
valuations in key growth sectors, as disproportionately lower valuations
are unlikely to last for long in a strong 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.
All opinions, views, findings and conclusions included in this report
constitute ASB’s judgment of this date and are subject to change without
notice.
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views contained cannot be reproduced or quoted in part or whole in any
form whatsoever without the written permission from ASB.
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