Market Review:

ASPI reverts from Y-T-D low .....

Both indices closed on a positive note after a month’s hiatus, with the ASPI gaining 282.10 points or 4.86% week-on-week and the MPI gaining 193.67 points or 3.83%. The ASPI closed at 6087.86 and the MPI closed at 5246.58 points.

DFCC’s acquisition of a 10% stake in Nations Trust Bank resulted in NTB leading the turnover in value for the week (12.92% of aggregate turnover value). JKH and HVA Foods too were among the top contributors to turnover in value, accounting for 7.54% and 6.26% of total turnover value respectively. Turnover value for the week recorded a 99.90% gain to Rs 10.62 billion (relative to last week’s Rs 5.31 billion) to amount to a daily average of Rs 2.12 billion.

Weekly turnover volume, too, saw an increase of 49.28% to 453.05 million shares compared to last week’s 303.49 million shares.

The Banking and Finance sector dominated weekly turnover value, accounting for 32.11% of total turnover value amounting to Rs 3411.01 million. The Manufacturing sector followed suit, recording a value of Rs 1202.79 million or 11.32%. The Land and Property sector meanwhile contributed 10.07% or Rs 1069.34 million to total turnover value over the week.

The largest number of shares traded over the week was within the Banking and Finance sector as 124.35 million shares (27.45%) changed hands. The Manufacturing sector contributed 19.46% or 88.14 million, while 36.93 million shares (8.15%) changed hands in the Power and Energy sector.

Market Capitalization recorded a 4.89% gain over the week to close at Rs 2218.64 billion, up from last week’s amount of Rs 2115.17 billion.

New entrant, Entrust Securities Ltd recorded the highest weekly price gain, closing at Rs 70.70, a significant gain from its reference price of Rs 20.00. Dankotuwa Porcelain Plc recorded a gain of 57.94% to close at Rs 36.80 while Swarnamahal Financial Services Plc closed the week at Rs 90.60 to represent a 49.75% gain.

Ceylon Leather Products Plc and Lanka Hospitals Corporation Plc were also among the top gainers, recording 47.29% and 43.31%, respectively.

The week’s top price losers was led by E B Creasy & Company Plc, recording a week-on-week decline of 16.67% to close at Rs 1500.00, relative to last week’s closing price of Rs 1800.00. J.L. Morison (NV) declined by 12.94% to close at Rs 1524.00, while Hapugastenne Plantations Plc closed at Rs 47.00 to represent a 7.84% decline.

Foreign investors continued to be net sellers over the week, with a net selling position of Rs 333.94 million, a 24.00% decline from last week’s net selling position of Rs 439.41 million.

Total Foreign sales for the week recorded a week-on-week gain of over 100% to Rs 1378.33 million, averaging Rs 275.67 million.

Blue Diamonds (NV), once again, topped the volume list accounting for 10.45% (or 47.36 million shares) of the week’s aggregate share volume; Panasian Power Plc meanwhile, contributed 7.31% of the total share volume as 33.11 million of its shares changed hands over the week.

Point of view

Markets reverted from last week’s Y-T-D lows early in the week as speculation over the relaxation of broker credit rules boosted sentiment. The Index recorded its biggest y-t-d daily gain (3.73%) on Monday, but lost steam towards the end of the week amidst profit taking.

The regulators’ decision over the broker credit request is likely to give direction to markets next week. With approximately 90% of Q3 earnings reported, the market PE has re-rated to 13.3x from 15.37x in August following the Q2 earnings, indicating that the ASPI is in fact correcting.