Monday, September 17, 2012

Bourse poised to continue relentless run

Stock Market Review for the week ending September 14, 2012:

The market took wider strides this week averaging an increase of approximately 98 points per day with the All Share at a 36 week high registering a 6% gain WoW, and concurrently the Milanka posted a gain of 8%. The daily average turnover rose to Rs. 2 bn as investors kept coming back into the market after remaining on the sidelines for a very long time. The market is poised to continue its relentless run in the ensuing week too, due to strong signals coming from sentiment indicators such as advances far outnumbering declines. The increase in divergence of the moving averages for most stocks, technical rally on most charts without break-away gaps, consistent demand for undervalued mid cap stocks fuelled by high turnover implying re-distribution of shares among new investors. The market also witnessed increased volatility with the standard deviation of the major index ASPI reaching almost 1% in the past week of activity.

On Monday the ASPI rose by 95 points, while the Milanka rose by a notable 155 points, and both indices closed at 5592 and 5248 points respectively. Market turnover of Rs.1.89 billion was recorded with active domestic participation driving trades. Retail favorites HVA and GREG were the day’s top traded stocks with the former gaining 27% at close. Institutional interest was witnessed in JKH, Sampath and Pan Asia Bank.

The market ended its unblemished two week positive run with the ASPI registering a drop by only a single point, while the more sensitive Milanka lost 29 points. However the market showed high activity levels as bargain hunters were accumulating shares in the belief of an opportunity to make quick gains, which could be likened to good archery. HVA Foods dominated the bulk of trading activity for the second consecutive day, up Rs 1.30 closing at Rs.19.00. Serendib Hotels, PABC and Commercial Bank (Non-voting) drove the market turnover. Among the top gainers, Dankotuwa Porcelain moved up by an impressive 34% or Rs.6.10 to close at Rs.24.10 while East West and C T Holdings recorded a 16% and 8% gain respectively.

The market recovered on Wednesday, with the ASPI posting a healthy gain of 77 points and the Milanka gaining 89 points to close at 5668 and 5308 points respectively. A turnover of Rs.1.2 billion was recorded on the back of retail and institutional trades. Index heavy JKH contributed the highest turnover for the day closing at Rs.208.40. All round interest was witnessed in GREG, East West, Sampath and Dankotuwa Porcelain. The shares of CIFL, Laugfs Gas (Non-voting) and Ceylon Tea Brokers were the top gainers for the day, with CIFL and Laugfs both gaining 14% and CTBL gaining a near 12% at close.

Both the ASPI and MPI gained in excess of 100 points on Thursday, with the ASPI and Milanka closing at 5777 and 5419 points respectively. A turnover of Rs. 1.9 billion was recorded, up Rs. 720 million when compared to the previous day. Interest in blue-chip companies such as Commercial Bank, JKH and HNB was witnessed, and these counters dominated trading, recording high turnover during the day. The shares of The Finance (Non-voting), Nation Lanka and Alufab were the highest gainers achieving 35%, 17.74% and 16.81% at close.

During the last trading day of the week, both indices recorded impressive gains, with the ASPI gaining 150 points and the Milanka gaining 170 points. An equally impressive market turnover of Rs. 3.2 billion was recorded with the bulk of this turnover coming from foreign participation.

Commercial Bank topped the highest turnover list and closed at Rs.115.50, gaining Rs.8.60 by the close of the week. JKH closed at Rs.218 and gained Rs.18. The other shares which drove the market turnover was Nation Lanka which closed at Rs.14.30 gaining 31% during the week, Vallibel One gaining 35% during the week to close at Rs.23.50 and E- Channelling which gained 7% for the week to close at Rs.6.40.

Hayleys – MGT topped the list among top gainers, as its price shot up to Rs.16.20 from Rs.10.70 which was a massive 51.4% return. CIFL also gained 44% after closing at Rs. 7.90 and Lankem Ceylon which moved up by 43% closed at Rs.203.90 after moving up by Rs.60.90. Dankotuwa Porcelain saw high interest among the traders as 5 million shares traded during the week which saw a return of 40% moving up by Rs.6.60 from Rs.16.90.

(Courtesy : Innovest Investments (Pvt) Ltd – an Investment Management Company licensed by the Securities and Exchange Commission of Sri Lanka)

source - www.island.lk

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