Friday, November 19, 2010

CSE Bounced Back on Budget Expectations

Stock Market Report by Capital Trust Securities (Pvt.) Ltd.

During the week the All Share Price Index (ASPI) declined by 35.06 points to close at 6565.00 points, while the Milanka Price Index (MPI) also declined by 42.52 points to close at 7115.43 points.  The daily average turnover was SLRs.1.8bn compared to SLRs.869mn last week and the week ended with foreign buying amounting to SLRs.615mn whilst foreign selling was SLRs.2.6bn.

On Monday, the opening of a shorter working week, the Colombo bourse dampened in a momentous scale as both the market indexes slumped notably. ASPI and MPI plunged 92.85 points and 129.47 points respectively while total turnover was only SLRs.760mn. Bukit Darah which closed down SLRs.171.00 at 8,279 posted day’s largest turnover followed by its subsidiary Carsons Cumberbatch which closed down at SLRs.1,000 with 47,100 shares traded. Keels Hotels which closed down at SLRs.20.70 was amongst the most heavily traded (2.2mn shares) and made a significant contribution to turnover.

On Tuesday, total turnover reached Rs.3.5 billion of which approximately SLRs.2.1bn (60%) was generated from Aitken Spense where a total of 11.45mn shares traded at SLRs.180.00 by way of three crossings while the share closed down at SLRs.177.00. Day’s most heavily traded Hotel Services Ceylon PLC also accounted for a significant part of day’s turnover with 23.5 shares traded between SLRs.24.50 and 27.30 of which 23mn shares was sold by its main share holder at SLRs.25.50. Wavered market sentiment resulted in ASPI and MPI losing 34.79 points and 45.05 points respectively.

The market that was on the verge of being over sold with relative strength indices reaching down to lower forties made a strong recovery on Thursday showing its resilience. ASPI increased by 92.58 points while the MPI increased 132.00 points. Total turnover reached SLRs.1.2bn to which the largest contribution was made by Sampath Bank which closed up SLRs.5.20 at 270.00 with approximately 1.1mn shares traded followed by JKH which closed up at SLRs.300.00 with more than 630,000 shares traded.  160 counters reported gains during the day while low priced counters such as SMB leasing and Piramal Glass were amongst the most heavily traded top gainers.

With Thursday’s recovery the market may decide to move up in the coming week in anticipation of tax cuts, import/excise duty cuts and many other concessions expected from the budget to foster economic growth. However annual profit taking by foreign investors and Retail Investors’ hesitation to take position due to regulator’s new credit rules may have an impact on the market recovery towards the end of the year.

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