Improved market activity

Market continued to show the declining trend for the third week running, on moderate trading as banking stocks grabbed attention this week. However bargain hunting managed to prop up the market on Friday, with both indices showing a modest growth after the distinct decline in indices during mid week. Overall Week on Week (WoW) the ASPI closed the week at 2911.6 points down by 65.3 points or 2.2 percent compared to last week, while the MPI fell by 59.1 points or 1.8 percent to close at 3274.8 points.

JKH once again retained its position as the highest contributor towards total turnover for the week.

Turnover of JKH was supported by couple of big crossings on Tuesday and Thursday which resulted in a total contribution of Rs.956.1 million (38.0 percent total weekly turnover) for the week.

Approximately 6.9 million JKH shares traded for the week, while the share price witnessed a decline WoW. The share price declined, by 1.4 percent, to close at Rs.140.00 on Friday. The counter traded at a high of Rs.142.75 per share and a low of Rs.135.00 per share for the week.

Amongst the banking counters HNB (Non Voting) was the leading contributor this week, placed second highest in terms of contribution for the week. Wednesday’s Rs.125.1 million generated by the counter helped it to become one of the key contributors for the week, contributing Rs.158.4 million.

The counter closed the week at Rs.85.00 per share, declining by 2.9 percent WoW, while within the week the counter was seen trading at a high of Rs.90.00 per share and Rs.83.00 per share.

Meanwhile Janashakthi share prices picked up this week, amid considerable trading witnessed on the counter from Tuesday to Friday.

Interest on counter was seen with investors reacting positively to the Rs.2.00 interim dividend announced on Tuesday. The share price rose by 15.6 percent WoW to close at Rs.13.00 per share on Friday becoming the week’s top gainer. A total of 11.4 million of Janashakthi shares traded within the week contributing Rs.150.3 million towards total turnover for the week.

Activity levels picked up this week, even amid trading being limited to four days, with turnover amounting to Rs.2.5 billion, compared to Rs.1.3 billion posted during last week. The driver of activity this week was JKH which had couple of crossings taking place during the week. Meanwhile average daily turnover for the week amounted to Rs.635.0 million.

Foreign participation fell further to 12.5 percent during the week, compared to 15.6 percent posted last week.

However, both foreign purchases and sales showed improvement WoW with foreign purchases amounting to Rs.424.9 million and foreign sales totalling to Rs.209.7 resulting in, Rs.215.2 of net foreign inflows for the week.

The most traded stocks this week in terms of volume were; Janashakthi, JKH, Piramal Glass, Vallibel and Seylan Merchant (Non Voting).

Point of View

Bargain hunters to resist the downward trend

The dull sentiment prevailed in the market as investors cautiously awaited a pronounced outcome from the political buzz over possible national elections soon. Week-on-Week ASPI dropped 2.2 percent while the MPI declined 1.8 percent on modest activity levels. We expect bargain hunters to provide some resistance to the downward trend over the coming week as the fall from the peak recorded on October 13, has now touched 7 percent. As we mentioned last week buying support would build around stocks which are expected to post positive third quarter results.

This was witnessed amongst the banking sector counters this week as they stood within the highest contributors to week’s activity. The results released so far by banks turned impressive with DFCC, Sampath and PABC recording notable jumps in their bottom lines backed by improved interest margins.

Thus banks which are yet to release their results would also gain more investor attention over the coming week. Similarly, other fundamentally sound stocks which have fallen in the recent downturn would also gain investor interest. Thus we advise investors to actively look for bargain hunting opportunities in the market.

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