Sunday, February 19, 2012

Acuity hopes interest in good stock will gather steam

The Colombo Stock Exchange remained volatile last week with the All Share Price Index falling to a new low since January 2011 on Valentines Day - February 14, brokers and analysts said.

 They commented that this was in stark contrast to the index hitting an all-time high on Valentines Day exactly one year previously.

Acuity Stockbrokers in a market report attributed Tuesday’s downturn to margin calls, foreign exchange volatility and fuel price hike and inflationary fears dulling sentiment.

"Foreign inputs and local institutional buying however propped up turnover levels with foreigners remaining net buyers for five consecutive days," the report said.

Acuity expected speculative counters to dominate trading this week but anticipated interest in fundamental counters gathering steam

The report noted that corporate earnings that are coming so far were "robust" with approximately 50% of the companies reporting earnings last week recording year-on-year growth.

"We expect retail sentiment too to be positive in the week ahead," Acuity said.

The market report noted that both indices had closed the week negatively although the market surged on Thursday and held its gains on Friday. The All Share Price Index lost 31.82 points (0.60%) from the previous week while the Milanka lost 77.71 points (1.68%) from the previous week.

However, the daily average turnover value for the week was up 68.66% from a week earlier with Commercial Bank, JKH and Lanka Milk Foods contributing over 39.9% of the aggregate turnover value for the week.

"The market capitalization however, declined marginally by 0.45% during the week to Rs.1,937.72 billion," the report said.

Foreign participation last week saw a net inflow of Rs.1.17 billion with sales running at Rs.285.6 million. Foreign purchases had increased 200% to Rs.2.78 billion last week from Rs.918.6 million the pervious week.

John Keells Stockbrokers reported that the indices had rebounded last week partially offsetting substantial losses the previous week with activity dominated by foreign play on the Commercial Bank which accounted for over 70% of the week’s turnover and helped the net foreign inflow of Rs.1.17 billion.

source -

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