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Monday, January 31, 2011

Profit taking keeps market in check

The bourse remained active during the week with the ASPI surpassing MPI midweek, however both indices have recorded a decline week on week with the ASPI closing at 7192.49 down by 0.85 percent over last week and MPI losing 127.83 points to and close at 7165.32.

The accumulated turnover for the week was Rs 19.42 billion with the daily average levels remaining at almost the same levels as that of the previous week.

The volumes dipped over the week with the average daily level of 139.52 billion as against 175.71 billion last week. Market capitalization was recorded at Rs 2.39 trillion, as compared to Rs 2.42 trillion in the preceding week.

The bourse outlined PER and PBV at 27 and 3 respectively. Banking, Finance and Insurance led the turnover tally with 22.3% sector share aggregating to Rs 4.33 billion, however the index was down by 191.14 points to end at 17,430.35.

Manufacturing, Plantations and Diversified represented 16.09 percent, 11.22 percent and 10.84 percent of total market turnover amounting to Rs 3.12 billion, Rs 2.18 billion and Rs 2.10 billion respectively. Banking sector contributed 42.19 percent to the overall share volume headed by Sampath Bank.

Horana led the Plantation Sector while Fort Land and Hayleys contributed to the Diversified sector. Sampath headed the turnover register with 6.12 percent of overall market share amounting to Rs 1.18 billion with the scrip closing the week at Rs 300.30, whilst Grain Elevators and PC House contributed 5 percent and 4 percent respectively. Lanka Aluminum the top gainer for the week closed at Rs 60.70 with a gain of 68.14 percent vis a vis last week on the back of a strategic investment by high net worth investor.

Three Acre Farm also climbed up outlining an increase of 60.91 percent against previous week.

Grain Elevators also became a top gainer in the bourse noting a northward momentum of 50.27 percent closing at Rs 197. Asian Alliance closed the week at Rs 126 recording a 30 percent decline week on week. MTD Walkers and Envi. Resources also recorded a decline of 28.71 percent and 18.51 percent respectively.

The scrips closed at Rs 60.60 and Rs 92.90 respectively. Foreign investors closed the week as net sellers amounting to Rs 779.3 million.

Foreign purchases for the week were Rs 1.02 billion and sales of Rs 11.8 billion. Market capitalization which opened the week at Rs 2,416 billion closed at Rs 2,393.47 billion.

Amana was the most traded share this week more than 82 million shares changing hands representing 12 percent of total volumes traded this week, whilst Mullers and Tess agro were the other two most traded shares for this week at 8 percent and 6 percent.
Point of view

The Colombo bourse witnessed active retail participation during the week’s trading with healthy turnover levels boosted by the movement of strategic stakes as well. Sound corporate earnings of the counters released so far have driven the plantation sector to a new height with the sector index gaining 11.5 percent during the week.

We expect investors to remain bullish on fundamentally strong counters within key sectors with sound earnings potential, while occasional profit taking to cash in on gains is expected to keep the market in check.