MARKETS

IPO line up to woo investor sentiment

The week saw both indices sliding as the ASPI shed 53.5 points to close at 7,406.02 and the MPI shed 18.1 points to close at 6,857.40. The indices recorded a weekly contraction of .7 percent and .3 percent.

The weekly value of turnover was Rs 18.49 billion, an increase of 20 percent from last week’s Rs 15.39 billion.

The volume of turnover this week was 686.14 million shares, as against last week’s volume of 696.45 million shares.

The volume of turnover contracted marginally week on week by 1.5 percent.

Land and Property sector contributed the most to this week’s turnover in value accounting for 29 percent while the Banking and Finance sector came up second highest contributor with 28 percent. The third highest contributor to the weekly turnover in value was the Diversified sector, accounting for 5.9 percent.

Volume of turnover was dominated by the Banking and Finance sector which accounted for 45.2 percent. Land and Property sector was the second highest contributor to the turnover in volume accounting for 20.5 percent while the Diversified sector accounted for 4.1 percent of the weekly turnover in volume.

The week’s Top Turnover list was headed by Colombo Land which traded 111.3 million shares resulting in turnover of Rs 5.01 billion, representing 27 percent of weekly turnover at the bourse.

The share closed at Rs 51, an increase of 42 percent from its last week’s price of Rs 35.70. The other major contributor to weekly market turnover was Nation Lanka which accounted for Rs 1.7 billion turnover, representing 9.4 percent of the weekly turnover. The share closed at Rs 30.60. Janashakthi placed third highest with a contribution of 5.9 percent of weekly turnover, resulting in Rs 1.1 billion turnover as the share closed at Rs 20.30. Confifi was the main price gainer this week as its share increased to Rs 327.80 from last week’s price of Rs 225, an increase of 45.7 percent.

The counter saw 245.6 million shares trading this week. The other major price gainer was Colombo Land with which recorded a price increase of 42.8 percent. Ceylinco Insurance was the other major counter in the price gainers list with 29.6 percent increase in price to close at Rs 51.

Harishchandra was the Top Loser for the week as its price declined by 34.5 percent to close at 1,310.20 from last week’s price of Rs 2,000. Other Top Losers were Chilaw Finance which lost 29.3 percent of its price to close at Rs 22.60 from last week’s price of Rs 32 and Dunamis Capital which lost 23.3 percent on last week’s price to close at Rs 19.10. Foreigners were net sellers this week with Rs 133.4 million outflow as against last week’s outflow of Rs 105.21 million. Total Foreign buying this week was Rs 1.28 billion, an increase of 4.5 percent from last week’s buying. Total foreign sales for the week was Rs 1.42 billion, an increase of 6.2 percent week on week.

The counter that saw the highest volume of shares traded this week was Colombo Land as a 10 percent stake of the counter was acquired by Kalpitiya Beach resorts. The shares traded accounted for 16.2 percent of the weekly turnover in volume. The other popular counters were SMB Leasing which traded 74 million shares, representing 10.8 percent of the weekly turnover and Nation Lanka which recorded 56.9 million shares changing hands.

Point of view

Local retail investors continued to drive market activity during the week while selling pressure has persisted resulting in both indices recording week on week declines. Strategic investments in Colombo Land and retail interest in the sector have dominated the value generated at the bourse this week.

We expect retail investor interest in mid caps and institutional/foreign interest in selected blue chips to continue into the week ahead with keen interest in the lineup of IPOs announced for the month ahead.

Acuity Stockbrokers Research