Indices remain high with polls outcome

Stocks rose modestly on early trading amidst the outcome of the presidential election. The growth trend continued even after poll results were announced on Thursday pushing ASPI (All Share Price Index) to breach the previous high held on Friday.

The ASPI ended the week with a gain of 3.0 percent or 104.7 points at 3636.4 points while the MPI (Milanka Price Index) rose by 3.4 percent or 137.0 points to close at 4181.8 points on Friday.

JKH was the highest contributor to the week’s turnover, contributing approximately Rs. 533.0 million, witnessing active trading throughout the week. JKH volumes for the week stood at 3.1 million, improving substantially compared to 1.8 million traded last week. The counter closed at Rs. 176.50 per share, with the share price appreciating by 1.6 percent Week-On-Week.

Apart from the above, Touchwood and Commercial Bank (COMB) contributed considerably to the week’s turnover. Touchwood contribution was approximately Rs. 400.0 million and COMB was Rs. 344.0 million to the total turnover, with approximately 3.6 million Touchwood and 1.9 million COMB shares trading respectively during the week.

Both counters saw major portion of their volume, being traded on early part of the week. Touchwood saw its price appreciate significantly by 24.7 percent to close at Rs. 116.25 per share this week, while COMB ended the week at Rs. 190.25 per share up by 2.8 percent Week-On-Week.

Environmental Resources (GREG) gained renewed retail interest this week, resulting in 1.3 million of its shares trading for the week with high interest seen on Friday. The counter contributed Rs. 167.6 million while trading within a wide range of Rs. 117.00 and Rs. 136.00 per share for the week. The share price appreciated by 12.6 percent compared to last week, to close at Rs. 134.00 per share.

Turnover for the week totalled Rs. 4.3 billion this week, falling by a moderate 29.0 percent compared to last week due to trading being limited to two and a half days for the week. Conversely, average daily turnover for the week increased by 18.4 percent to Rs. 1.4 billion during the week.

Foreign investors remained net sellers for yet another week, standing at a net amount of Rs. 1.0 billion. The month of January saw high foreign sales amounting to a total of Rs. 2.9 billion net foreign outflows. Total Foreign purchases for the week stood at Rs. 443.6 million, while foreign sales totalled to Rs. 1.5 billion.

Foreign participation was high at 22.2 percent of total activity, compared to last week’s participation level of 16.4 percent.

Among the highest traded stocks during the week were Seylan Merchant (Non Voting), Kshastriya Holdings, Seylan Merchant and Seylan Bank (Non Voting) and Lanka Cement.

The market still moving up

The two and a half day traded week ended 28.01.10 saw the ASPI moving 104.7 points (2.96 percent) up. With the said climb the ASPI has reached a level of 3636.4; the biggest contribution for the climb came from today’s trading (contributing to the tune of 45 points up).

The market has been moving based on sentiments prior to the elections, and the first day of trading subsequent to the elections saw the bourse pushing further up. As mentioned repeatedly on previous ‘Weekly Reports’, the bourse seems to be entering ‘Overheated’ territory (based on fundamental grounds); surging at current levels.

Albeit, the market getting heated up (based on fundamentals), there are strong counters one could look to invest other than the overheated speculative counters.

Based on a Sectoral perspective; sectors such as banking and plantation still remains to be undervalued. Hence we expect the investors to profit out on the over heated speculative stocks.

(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.)