Continued liquidity crunch affects bourse with dull week
Both indices reached the lowest levels for 2011 at the close of
trading on Friday, with the ASPI losing 239.78 points to close at
6,537.25 and the MPI losing 281.38 points to close at 6,029.75. The ASPI
decreased by 3.54 percent and the MPI decreased by 4.46 percent, while
overall activity levels have also recorded a week on week decline.
The weekly turnover value recorded a 35.56 per cent decrease to Rs
6.75Bn, amounting to a daily average value of Rs 1.35Bn, when compared
with last week’s daily average turnover of Rs 2.10Bn. Blue chip JKH and
new entrants Softlogic and ExpoLanka accounted for 20.71 per cent of the
week’s total turnover value.
The number of shares traded decreased by 39.53 percent, averaging
58.67Mn shares traded daily as against 97.03Mn traded last week.
The Diversified sector led the turnover in value this week,
accounting for 30.45 per cent of turnover in value amounting to Rs
2.06Bn.
The Banking & Finance sector was the second highest contributor to
turnover, accounting for 24.02 per cent amounting to 1.62Bn. Third
highest on the turnover value list was the Manufacturing sector with
9.93 per cent or Rs 0.67 Bn.
Volume of turnover for the week was dominated by the Banking and
Finance sector with 85.03Mn shares being traded or 28.98 per cent of
volume of turnover.
The Diversified sector followed, representing 25.29 per cent of total
turnover volume (74.20Mn shares traded).
Third highest contributor to turnover volume was the Manufacturing
sector, which accounted for 11.66 Per cent or 34.21Mn shares. Market
Capitalization as at today’s close i.e. Rs 2319.92Bn, recorded a loss of
Rs 84.9Bn in value or 3.5 per cent as against last week?s close. Paragon
was the major price gainer (60.1 percent) this week, closing at Rs
2690.0 from last week’s closing price of Rs 1680.0.
Hotel Sigiriya was the second largest price gainer, recording a 26.1
per cent increase to close at Rs 77.2 (from Rs 61.2). Bimputh Lanka
gained 24.7 per cent from its previous price of Rs 65.7 to close at Rs
81.9.
Confifi Hotel was the major price loser over the week, declining 27.5
per cent to close at Rs 194.3. O’nally and AMF Co. were also major
losers with O’nally decreasing 23.5 per cent to Rs 97.5 and AMF Co
declining 20.3 Per cent to close at Rs 574.5.
Swarnamahal Finance and Eastern Merchant declined 19.7 per cent and
18.2 per cent respectively.
Foreign participation, fell drastically over this week, with a net
selling position amounting to Rs 571.21Mn, relative to last week?s net
buying position of Rs 165.47Mn.
Expolanka topped the volume list recording 24.83Mn shares changing
hands representing 8.46 per cent of the aggregate share volume. Panasian
Power contributed 7.98 per cent of aggregate share volume with 23.40Mn
shares changing hands.
Point of view
The downward trend persisted throughout the week?s trading amidst a
continued liquidity crunch. Both indices closed on a negative note with
the year to date return of the Colombo bourse recording a negative 1.5
per cent at Friday’s closing level of 6537.25. The market has declined
16.3 per cent from its peak of 7811.82 in February 2011 relative to the
rally in 2010 which saw the market peak at 7147.77 and record a dip of
12.5 per cent to bottom out at 6257.01 in less than two months.
Valuations on fundamentally sound stocks with earnings potential
offer attractive investment opportunities at the current price levels,
however the immediate direction of the market remains volatile.
Corporate earnings for the June quarter are expected to flow in next
week which will present attractive valuations at current levels, which
should give some impetus to investor sentiment and market momentum. |