Market continues upward trend
Weekly market review
The market continued its upward trend witnessed in the final trading
week of 2012 with the ASPI closing up 140.58 points (or 2.51%) to close
the week at 5747.71 points. The S&P SL 20 index gained 1.72% (or 52.72
points) closing the week at 3121.71 points, while the MPI ceased to
exist from January 1, 2013.
In terms of individual counters, Commercial Bank was the highest
contributor to the week’s total turnover value accounting for 38.75%
with a value of LKR 1.44bn. JKH’s contribution amounted to 17.95% of
total turnover value with a value of LKR 667.75mn while HNB accounted
for 12.32% of total market value contributing LKR 458.27mn.
Total turnover value for the four-day week amounted to LKR 3.72bn
compared to LKR 1.27bn in the previous 3 day week. The daily average
turnover value amounted to LKR 929.80mn up 118.90% from last week’s
value of LKR 424.77mn. Market Capitalization increased by LKR 29.31bn
(or 1.36%) to LKR 2183.25bn from last week’s value of LKR 2153.94bn. The
Banking and Finance sector was the highest contributor to the week’s
total turnover value - aided by Commercial Bank - accounting to 61.79%
(or LKR 2.30bn). The Diversified sector - helped by JKH - contributed
19.81% (or LKR 736.74mn) to the total turnover value. The third highest
contributor was the Health Care sector, recording a turnover value of
LKR 175.43mn (or 4.72%) of the week’s total total turnover value.
The Banking and Finance Sector dominated in terms of share volume too
by accounting for 60.52mn shares (or 42.67%) of the total trades for the
week. The Health Care sector and the Diversified sector were the second
and the third largest contributors in terms of volume with the Health
Care sector accounting for 19.24mn shares (or 13.57%) and the
Diversified sector exchanging 15.78mn shares (or 11.13%) of the week’s
Infrastructure Development was the highest price gainer for the week
with a W-o-W gain of 27.86% closing at LKR 179.00 compared to last
week’s close of LKR 140.00. SMB Leasing [NV] gained 25.00% (W-o-W) to
close the week at LKR 0.50 while Arpico Finance Company closed the week
at 83.50 up 20.14% (W-o-W) from the previous week. Ceylon Printers was
the top price loser for the week, declining 9.89% (W-o-W) to close the
week at LKR 1820.20 compared to last week’s close of LKR 2020.20.
Colombo Fort Investments dropped 9.40% (W-o-W) to close at LKR 105.00
while Colonial Motors closed the week at LKR 145.00 to represent a 9.38%
W-o-W decline. Kalamazoo and Bimputh Finance too were also among the
price losers declining 8.84% and 8.38%, respectively.
Foreign investors recorded a net buying position of LKR 0.40bn
relative to LKR 0.74bn recorded last week (45.85% W-o-W decline), as
average daily net inflows declined 59.39% (W-o-W) to LKR 0.10bn from LKR
0.25bn recorded last week. Daily average foreign inflows amounted to LKR
0.62bn relative to LKR 0.27bn recorded last week (127.71% W-o-W
increase), while daily average foreign sales amounted to LKR 0.52bn,
relative to LKR 0.02bn last week. In terms of volume, JKH and Textured
Jersey led foreign purchases, while HNB and Softlogic Holdings led
foreign sales. In terms of value meanwhile, JKH and Nestle led foreign
purchases, while foreign sales were led by HNB and Commercial Bank.
Point of View
The bourse ushered in the year with positive investor sentiment
leading to W-o-W gains in indices, backed by a notable rebound in
volumes. The main share index crossed 5700 points for the first time in
12 weeks to record a W-o-W gain of 140.58 points.
Turnover levels too improved significantly over the four-day trading
week as large block trades in Commercial Bank and JKH helped sustain
Daily average turnover was consequently higher, hitting LKR 0.9bn
relative to LKR 0.4bn last week. Foreign investor activity continued to
make positive strides as mid-week outflows were offset by positive
inflows of LKR 0.52bn over the remainder of the week. Similar sentiment
is likely to prevail in the week ahead.
Meanwhile, the Central Bank unveiled its medium-term monetary policy
targets highlighting its priority to maintain inflation (particularly
core) at the mid-single digits. The Bank added that while it sees annual
average inflation hitting 7.4% Y-o-Y in 2012, its expectations for
sustained declines in inflation coupled with continued fiscal
consolidation should imply lower rates. Consequently, the CB plans to
continue systemically allocating EPF funds to the stock market, private
equities and corporate debt.
The bank also highlighted its commitment to encourage equity and
corporate debt markets to provide non-inflationary sources of funding to