Saturday, October 16, 2010

CSE on a Bumpy Ride

 During the week the All Share Price Index (ASPI) declined 206.75 points to close at 6626.86 points, while the Milanka Price Index (MPI) also declined by 317.03 points to 7149.26 points.  The daily average turnover was SLRs.3.8bn compared to SLRs.4.8bn last week and the week ended with foreign buying amounting to SLRs.0.8bn whilst foreign selling was SLRs.2.8bn.

On Monday largest turnover was reported on Aitken Spence which commenced trading after its recent share split. Approximately 19mn shares traded between SLRs.210.50 and 230.00 posting SLRs.4.1bn turnover, out of which 18mn shares were transferred from Sri Lanka Insurance General Fund to the Life Fund. DIMO which closed up SLRs.37.00 at 948.20 made a significant contribution in terms of turnover with approximately 0.5mn shares traded followed by many other blue chip counters. Ceylon Leather Products (CLPL) warrants which commenced trading during the day were amongst the top gainers while its share closed down SLRs.7.10 (6.5%) at 102.30. Market closed almost flat with ASPI gaining 1 point awhile MPI losing 8.26 points.

The Colombo bourse witnessed its year to date biggest decline on Tuesday with ASPI and MPI losing 300.59 points and 338.28 points respectively. Total turnover for the day amounted to SLRs.3bn to which JKH contributed approximately SLRs.599mn followed by 1.4mn shares of Hayleys which traded between SLRs.330.00 and 343.00 posting SLRs.471mn. Day’s most heavily traded (11.6mn shares) Richard Pieris closed down SLRs.1.50 (12.6%) at 10.40 after reaching a high of SLRs.12.10 during early trading hours.

On Wednesday the market experienced a steep decline during early trading due to panic selling by investors and stock broking firms. The market recovered during mid day with the support of bargain hunters and closed up on a positive note with ASPI and MPI gaining 94.81 points and 47.13 points respectively. Total turnover for the day amounted to SLRs.4.3bn of which approximately SLRs.1bn was generated on JKH with 3.1mn shares traded. LOLC and Hayleys made significant contributions in terms of turnover while Carsons Cumberbatch was also amongst the largest turnovers with 153,000 shares traded between SLRs.790.00 and 1049.00 to close up SLRs.153.50 (17.8%) being amongst the top gainers.

Thursday’s largest turnover of SLRs.408mn was reported on LOLC for a volume of 314,700 shares while the share closed down at SLRs.1298.60. Approximately 1.2mn shares of JKH was also traded during the day giving significant contribution to day’s total turnover of SLRs.2.8bn. The market surged during the early trading hours however closed almost flat with ASPI and MPI reporting marginal loses of 6.75 points and 27.81 points respectively. Touchwood Investments closed up SLRs.3.10 (11%) at 31.10 being the most heavily traded top gainer.

On Friday the market closed up marginally with ASPI and MPI gaining 4.78 points and 10.19 points respectively. 1.97mn shares of Distilleries traded between SLRs.169.00 and 174.00 of which 1.5mn traded at SLRs.170.00 by way of crossings. Environmental Resources and its warrants were amongst the most actively traded top gainers for the day.

During the last two weeks the market declined 521 points from its recent all time high reported on 1st October. The overboughtness of the market has now eased with the Relative Strength Index reaching down lower fifties. With strong corporate earnings to be reported the market is well poised for another upsurge. Investors are advised to aggressively buy in to fundamentally strong counters which are at present at a discount price.

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