Monday, August 29, 2011

Retail dominance continues

Alufab Plc and Singalanka Standard Chemicals Plc lost 40.1% and 34.5% respectively over the week.

Alufab Plc closed the week at Rs 81.9 while Singalanka Standard Chemicals Plc closed at Rs 305.8. Royal Palms Beach Hotels Plc followed suit, declining 14.2% to close at Rs 65.8. City Housing and Real Estate Co. PLC and Property Development PLC were also among the top losers for the week.

Foreign investors remained net sellers, with a net selling position of Rs 4.81 million compared to last week's net selling position of Rs 406.31 million, however, this represents a significant decline of 98.82% in foreign sales. Foreign buying amounted to Rs 517.68 million representing a 38.26% decrease over the week before.

Over the week, foreign investors showed particular interest in JKH shares. Foreign selling totalled Rs 522.49 million, a week-on-week decline of 58.03%.

Tess Agro Plc topped the volume list recording 30.13 million shares changing hands representing 8.90% of the aggregate share volume. HVA Foods contributed 7.29% of aggregate share volume, with 24.67 million shares changing hands.

The market closed on a negative note, with both the ASPI and MPI recording week on week losses of 1.42% and 1.77%, respectively. The ASPI closed at 6852.96 and the MPI closed at 6222.08.

The weekly turnover value recorded a significant loss of 55.43% to Rs 8.66 billion, amounting to a daily average value of Rs 1.73 billion, in comparison to last week's value of Rs 3.88 billion. Turnover value for the week (23.4%) was dominated by HVA Foods, Colombo Land and Development Company Plc, and Colonial Motors PLC, amidst continued retail interest in these stocks. The number of shares traded declined by 53.42%, averaging 67.71 million shares traded as against 145.36 million traded last week.

Turnover in value for the week was led by the Banking and Finance sector, accounting for 17.67%, amounting to Rs 1.53 billion. Second highest contributor to turnover value was the Beverage Food and Tobacco sector contributing 14.50% or Rs 1.26 billion. Third highest contributor on the turnover value list was the Land and Property sector with 13.77% or Rs 1.19 billion.

Volume of turnover for the week was dominated by the Banking and Finance Sector, accounting for 22.31% of total market volume, with 75.52 million shares changing hands, followed by the Manufacturing sector, which represented 11.19% or 37.89 million shares.

Third highest contributor was the Power and Energy sector, with 34.92 million shares being traded, or 10.32% of turnover volume. Market capitalization recorded a loss of 1.4% to close at Rs 2457.17 billion, as against last week's close of Rs 2492.23 billion.

The major price gainer for this week was Samson International PLC, recording a gain of 36.4%, to close at Rs 150.0. Singer Finance (Lanka) Ltd. was the second largest price gainer, closing at Rs 37.3, a gain of 33.7% from its previous week's closing price of Rs 27.9. The third highest price gainer was Colonial Motors PLC, recording a gain of 28.5%, to close at Rs 413.6.

Point of view

Markets were mixed over the week, as consecutive losses early in the week were marginally reversed by end-week. Markets were buoyed by retail interest in specific counters on mostly speculative trades.
Net foreign outflows continued to be high despite significant foreign purchases in certain blue-chips in the latter half of the week.

We expect moderate retail activity in the shortened trading week ahead. We continue to see potential in fundamentally sound stocks, especially in the context of the recently concluded June earnings season which indicates year-on-year growth across a large proportion of the sectors.

Acuity Stockbrokers Research/Sri Lanka Equities
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