Investors bullish on IPOs

The bourse commenced the week with increases in both ASPI and Milanka.

However, as the week progressed both indices declined consistently and ASPI noted a decline of 19 points to close at 6658.45 and Milanka shed 42 points to end at 7199.62.

Aggregate market turnover was at Rs 6 billion which was much below the previous week’s level of Rs 18 billion (excluding Rs 9 billion strategic transaction of Royal Ceramics to Vallibel One).

Further, the total turnover for the week included Rs 1.3 billion from the Cargills strategic deal with Kotmale Holdings. Cargills acquired 73 percent stake in Kotmale for Rs 900 million as part of its expansion and diversification plans.

Market Capitalization reduced from Rs 2209 billion recorded last week to Rs 2202 billion.

Beverage, Food and Tobacco emerged as the leading sector with 28.32 percent market share. Banking and Finance sector followed at 24.27 percent while Diversified added 18.38 percent to the market turnover.

Kotmale Holdings, Cargills and Distilleries were the majors to add to the Beverage sector while Commercial and Sampath Bank lifted the banking sector turnover.

Diversified sector was supported by Dunamis Capital, JKH and Hemas Holdings. Kotmale Holdings was the highest contributor to the market turnover at 17.22 percent with Rs 1 billion in turnover and 26.8 million in volumes. Commercial Bank was another major contributor with 9.79 percent share adding Rs 600 million with the share volumes of 2 million. Dunamis, Cargills and JKH added Rs 364.8 million, Rs 346 million and Rs 322 million respectively to the market turnover.

The most traded scrip during the week was Piramal Glass with 45.3 million shares to close at Rs 4.80. Kotmale Holdings and Dunamis Capital followed with volumes of 26.8 million and 23.9 million shares respectively.

After weeks of being net sellers the foreign investors emerged as net buyers for the week with Rs 8.78 billion purchases as against sales of Rs 7.78 billion . The week’s top gainer was Kotmale Holdings with a price rise of 53.85 percent and the scrip closed at Rs 42. Hunters, closed at Rs1300 with the gain of 29.13 percent. Piramal Glass and Cargo Boat were the other successive gainers for the week with the share price rising by 26.32 percent and 24.52 percent respectively.

The major losers for the week were Selinsing, Huejay, Indo Malay and Lake House Printers losing value by 23.08 percent, 21.88 percent , 19.09 percent and 13.59 percent respectively.

Point of view

The four-day trading week at the Colombo bourse has seen relatively lower levels of activity with both indices losing marginally, while strong investor interest in the current IPOs have been visible.

The current market has attracted high net worth and strategic investors who are bullish on the outlook for the Sri Lankan economy and actively consolidating their positions.

We expect the market to remain steady with investors looking to the forthcoming budget for direction.

source - www.dailynews.lk