Market rebounds from new low

Hayleys MGT recorded the highest price decline of the week, closing at Rs 13.60 to represent a 32.67% price decrease.

Softlogic Capital Ltd followed suit, declining 31.82% week-on-week to close at Rs 16.50. Mercantile Shipping Company Plc closed down 30.43% from last week's Rs 235.00 to close at Rs 163.50. AMF Company Ltd and CDIC, were also amongst the top price losers, losing 29.27% and 27.01%, respectively.

Foreign participation in the bourse this week recorded a net inflow of Rs 1.17 billion as against last week's net sales position of Rs 285.56 million.

Total foreign purchases increased by over 200% to Rs 2.78 billion from Rs 918.61 million recorded last week. The daily average net buying position amounted to Rs 233.07 million compared to last week's daily average net selling position of Rs 95.19 million.

Blue Diamonds (NV) topped the volume list accounting for 7.05% or 28.82 million shares of the week's aggregate share volume. Commercial Bank of Ceylon Plc contributed 5.91% (24.19 million shares) to the market's total share volume.

Both indices closed the week on a negative note with the ASPI losing 31.82 points (down 0.60%) and the MPI losing 77.71 points (down 1.68%). The ASPI closed at 5285.17 and the MPI closed at 4549.43.

The daily average turnover value for the week was Rs 1.73 billion, a 68.66% increase relative to last week's value of Rs 1.03 billion. Commercial Bank of Ceylon Plc, JKH and Lanka Milk Foods Plc together contributed 39.91% to the week's aggregate turnover value. Market capitalization however, declined marginally by 0.45% during the week to Rs 1937.72 billion.

Over the week, the Banking and Finance sector contributed the most to total market turnover value, accounting for 43.79% or Rs 3.79 billion.

The Diversified sector trailed behind contributing 16.81% or Rs 1.45 billion to the market; the Beverage Food and Tobacco sector meanwhile accounted for 9.09% of total market turnover, a contribution of Rs 786.08 million.

Weekly turnover volume for the week was once again dominated by the Banking and Finance sector with the sector accounting for 32.43% (or 132.67 million shares) of the market's total share volume.

The Manufacturing sector trailed behind with 65.08 million shares changing hands to represent a 15.91% share of total turnover volume.

The Diversified sector meanwhile accounted for 13.76% or Rs 56.27 million of weekly turnover volume.

The week's top price gainers list was led by debutant Agstar Fertilizer Ltd, with the non-voting share increasing 150.00% from its reference price of Rs 6.00.

Agstar Fertilizer Ltd's voting share meanwhile gained 93.33% from its reference price of Rs 9.00 to close at Rs 17.40.

Lanka IOC too was amongst the top gainers, increasing 32.45% over the week to close at Rs 20.00. ACME and Huejay International Investments Plc were also among the week's price gainers with share prices recording gains of 24.41% and 21.42% respectively.

Point of view

Volatility pre-dominated over the week, with the main Index falling to a new low since January 2011.

Co-incidentally, and in stark contrast to a year-ago when it hit an all-time high, the Index fell to 5009 on February 14 as margin calls, FX volatility and fuel price hike induced inflationary fears dulled sentiment.

Foreign inflows and local institutional buying however propped up turnover levels with foreigners remaining net buyers for five consecutive days.

We expect speculative counters to dominate the week ahead but anticipate interest in fundamental counters gathering steam. With corporate earnings thus far being robust (approximately 50% of the corporates reporting earnings this week recorded Y-o-Y growth) we expect retail sentiment too to be positive in the week ahead.

Acuity Stockbrokers Research / Sri Lanka Equities Weekly Market