Market Review :

Low volumes dominate despite slight uptick in market indice

The week’s turnover value was generated mainly by trading in JKH which 1.12 million shares (amounting to Rs 221.69 million) changed hands. Sampath Bank and Commercial Bank followed suit, contributing 7.94% and 6.96% respectively, to total turnover value.

Total market turnover value reflected a week-on-week decline, with the daily average turnover value amounting to Rs 311.43 million, down 27.72% from last week’s value of Rs 430.83 million. Market capitalization, however, gained 2.53% over the week to Rs 1949.46 billion from Rs 1901.42 billion last week.

The Banking and Finance sector continued to dominate weekly turnover value, contributing Rs 448.45 million (or 28.80%) amid interest in counters such as Sampath Bank, Commercial Bank and Amana Takaful Plc.

The Diversified sector too made a noteworthy contribution of Rs 418.27million or 26.86% to the market. The Manufacturing sector meanwhile accounted for 10.98% (Rs 170.94 million) of total turnover value. Counters that added to the Manufacturing sector included Royal Ceramics and Blue Diamonds [NV]. The Banking and Finance sector also led the turnover volumes, accounting for 36.01% (48.36 million shares) of total volume traded. SMB Leasing [NV] and Swarnamahal Finance were among the stocks that contributed most to the sector.

The Manufacturing sector meanwhile contributed 18.09% as 24.30 million shares changed hands, while the Healthcare sector contributed 9.79% (13.15 million shares), helped by 11.17 million shares of Asiri Surgical being traded over the week.

PC Pharma Plc recorded the highest price gain over the week, closing at Rs 16.30 up 55.24% from last week’s close of Rs 10.50. Beruwala Walkinn gained 32.89% to close at Rs 80.00 while Blue Diamonds [NV] closed at Rs 2.20, up 29.41% from last week’s close. Keells Food Products Plc and Udapussellawa Plantations Plc were also amongst the top price gainers, recording 27.15% and 25.41%, respectively.

The top price loser for the week was Huejay International Investments Plc which declined 35.65% to close at Rs 61.00, relative to last week’s close of Rs 94.80. Sinhaputhra Finance Plc trailed behind, losing 21.84% to close at Rs 68.00, while CDB [NV] closed at Rs 40.20, down 19.60% week-on-week.

Both indice recorded upward movement throughout the week, with the ASPI gaining 113.53 points (+2.22%) to close at 5222.09 and the MPI gaining 82.73 points to close at 4693.59 points (+1.79%).

Point of view

Apathetic investor sentiment dominated yet again this week, with daily turnover levels averaging Rs 0.3 billion, well below the year’s daily average of Rs 1.1 billion.

Foreign inflows – albeit inflows - declined 80.4% over the week, contributing to the overall sluggish sentiment.

The main share Index nevertheless showed some positive signs, gaining 2.2% week-on-week, compared to consecutive losses over the past three weeks. Muted sentiment nevertheless, is likely to dominate the week ahead.

Q1 2012 corporate earnings have remained mixed, with approximately 56.0% of the 71 companies that have reported earnings thus far recording Y-o-Y gains.

The Banking and Finance sector in particular reported gains across the board, although results across other sectors have been relatively mixed.

Tourist arrivals meanwhile continue its uptrend, with April arrivals recording a 9.0% increase Y-o-Y; demand for the country’s main agricultural export tea also showed an uptick, with March exports rebounding by 9.4% Y-o-Y relative to the declines in January (-16.5%) and February (-5.6%). 5