Monday, November 29, 2010

All share Price Index, History Performance & Way forward Update - 02

22/11/2010 (S.L.S.Picks) We have obtained the Movement of All Share Price Index for the Past 22 months commencing from 01/01/2009 in order to have a closer look of its behavior & to get a clear idea of its future direction. Here we have used 30 day,90 day, & 180 moving averages against the movement of ASI for the past 22 months period.
  • In January 2009 All Share Price Index was at 1533.79
  • End of the trading session as at 18/11/2010 (Thursday) All Share Price Index was at 6565.00. A growth of 5031.21 points (328.02%) for the period. These performance helps Colombo Stock Exchange to be in No 01 position in terms of growth in Asia so for year 2010, & to retain a top position in the World  for this year.
  •  During this period ASI touched the 30 day moving average in eight times ( A,B,C,D,E,F,G & H points) & fell down below 90 day moving average only in a single time (C) which is during the period of month of November 2009. 
 A - Reported during the period between 07/07/2009 to 17/07/2009. ASI was at 2376.22 & 2370.55 levels. The bearish trend lasts only for 10 days.(approx) 

                                   GROWTH - 140.26 points

B - During the period between 11/08/2009 to 24/08/2009. ASI was at 2510.81 & 2522.92 The bearish trend lasts only for 14 days.(approx)

                                    GROWTH - 559.99 points

C - Reported during the period between 19/10/2009 to 30/11/2009. ASI fluctuated between 3082.91 -  2913.39 levels. The bearish trend lasts for 41 days (approx) & this was the longest period that the market was at a downward trend for the year 2009 after the Bull run commenced in May 2009.

                                          GROWTH - 911.91 points

D - Reported during the period between 01/03/2010 to 05/04/2010. ASI was at 3825.30 & 3781.90 levels.In this scenario bearish trend continued for 34 days (approx).

                                                   GROWTH - 453.79 points

E - Reported between 21/05/2010 & 31/05/2010.At that time ASI was fluctuating between 4235.69 points & 4237.16 points. The bearish trend continued for 13 days (approx).
                                                         GROWTH - 311.49 points

F - Reported on 06/07/2010 & the ASI was at 4547.18 points.The bearish trend last only for 7 days.
                                GROWTH -   315.68 points

G - Reported on 09/08/2010 & ASI was at 4862.86. Bearish trend last only two days.This was reported after touching ASI 5000 mark for the first time in the history of Colombo Stock Exchange & the index touched high as 5156.83 before settling down.

                                GROWTH - 1971.75 points

H - Reported on 11/10/2010 & the ASI was at 6834.6. During this two months period ASI growth was staggering 1971.75 points, the highest growth reported for the last 22 month period.

The bearish trend still continues at the Colombo Stock Exchange & now its more than 01 month in the negative territory. As at 18/11/2010 it was 01 month & 7 days. The ASI touched almost 90 day moving average on 16/11/2010 by reporting ASI 6472.42. However later we witnessed a slight recovery in the index due to the strong buying support for the Blue chip counters & fundamentally sound counters since many counters were trading at bargain price levels & on back of healthy 3rd Q/ 2nd Q corporate results.

The main reason for the negative trend in the market is the settlement of Debts by the investors before the start of the new year 2011 in order to comply with the new regulations. Further we can expect a market correction especially after a massive growth of ASI 1971.75 points withing a very short period of 02 months. However we noticed that the market was trading almost 600 points down from the high as ASI 7100 levels.

                                         GROWTH -  ? points

  • Can we expect the same growth momentum of ASI reported during the past one year & 11 months to continue in future as well? 
  •  The ASI movement as at end of 18/11/2010 was still below the 30 day moving average. In all the previous occasions once the ASI breaks the 30 day moving average it gave a start for a new bull run.
  •  The country is heading for a strong economic recovery led by the H.E. President Rajapaksha one of most powerful leaders in the world now, who was successful in eradicating the 30 year old civil war in our country. Companies in the Banking & Finance, Tourism, Construction, Plantation + Agriculture sectors etc are the possible sectors to lead the economy in post war Sri Lanka. However the bearish trend still continues in the Colombo Stock Exchange due to the over trading by the investors & the poor financial control measures adopted by the Stock Brokering Companies in Sri Lanka.
  •  The corporate results for the September quarter reflected strong growth performances by the listed companies.
  •  We strongly believe that the best period of the Colombo Stock Exchange is yet to be seen.

  • 2010 budget was an encouraging one for the listed companies as the corporate taxes have reduce to 28% from 35%. Removal of debit tax is a positive move for the banks as well as the reduction of Vat from 20% to 12% would definitely improve the bottom line of the banks.  

data -

Related stories - All Share Price Index - History peformances & Way forward Update 01

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