Monday, October 1, 2012

Bourse sustains upwards momentum

* Stock Market Review for the week ending 28st September 2012

Market beat this week was purely revolving around the banking & insurance sector, and the excitement culminated with the announcement of the sale of shares in Aviva NDB Holdings to the insurance giant American International Assurance (AIA). NDB Group will thus receive USD 59 million. From the moment the sale was announced investors were busy trying to assess the impact the cash infusion resulting from the sale would have on NDB Bank’s shares and NDB Capital shares in terms of capital gains and this caused the market go on a roller coaster. The ASPI gathered momentum moving up 61 points during the week, while the Milanka gained 111 points, and the average turnover was Rs.2 billion. The net foreign inflow averaged Rs.283 million per day marking a significant improvement over the previous week. With the market’s standard deviation cooling off at a level of 0.12% we expect buying to return next week with moderate price increases.

The market opened with renewed vigor for the last week of trading week for September. On Monday the market close on a mixed note with the ASPI closing slightly higher by 5 points to close at 5975 while the Milanka declined by 35 points to close at 5498. The slight dip in the Milanka can be attributed to price depreciations in large-cap stocks such as JKH and CTC. Turnover for the day was a respectable Rs. 749 million with blue-chips dominating turnover. Top contributors for the day were NDB Bank, Distilleries and John Keells Holdings contributing Rs. 67.5, 64.8 and 55.9 million respectively. Nation Lanka Finance, Aviva NDB Insurance and Dialog were the top traded counters for the day with Dialog attracting both retail and institutional interest.

The Milanka regained lost ground on Tuesday by closing higher 35 points at 5534 while the ASPI gained 10 points to close at 5926. Turnover of Rs 1.070 million was recorded on the back of widespread institutional activity dominating trades while retailers remained on the sidelines. Top contributors to turnover were Asiri Hospital Holdings with Rs. 186.6 million, Dialog Axiata with Rs. 140.2 million and National Development Bank with Rs. 91.9 million. Continued institutional interest in Dialog, NDB, JKH and Sampath Bank was witnessed. Notable gainers for the day were SMB Leasing (Non-voting) up by 25% to close at Rs. 0.50, City Housing up by 8.8% to close at Rs. 21.00 and Trade Finance and Investments up 6.7% to close at Rs. 17.60.

On Wedensday, both the indices closed up by nearly the same amount with the ASPI closing up 17 points to 5943 and the Milanka closing up 18 points to 5553. A staggering turnover of Rs. 4.2 billion was recorded in part due to a deal valued at a little over Rs. 3 billion in Aitken Spence taking place with 24.6 million shares being traded. Institutional and high net worth investor interest was also witnessed in John Keells, Ceylinco Insurance, Nestle and NDB Bank. Crossings of 400,000 shares in John Keells at Rs 223.00 and 100,000 shares of Nestle at Rs. 1200.00 took place further boosting the turnover. Top gainers for the day were Sanasa Development Bank, Madulsima and Asia Siyaka gaining 19%, 16% and 10% during the day.

The ASPI gained 5 points to close at 5948 and the Milanka gained 21 to close at 5574 on Thursday. Turnover of Rs. 1.8 billion was recorded for the day with a net foreign inflow contributing almost 59% of the day’s figure. Top contributors to turnover were Asiri Hospital Holdings contributing Rs. 887.9 million, John Keells Holdings with Rs. 213.1 million and NDB Bank with Rs. 76.1 million.

Notably Plantation companies were included in the top gainers list with Maskeliya, Madulsima and Talawakelle recording positive returns of 8.3%, 8.2% and 5.9% respectively. Considerable investor interest was seen on banking stocks as NDB, Sampath, HNB (Non-voting) and Seylan (Non-voting) ended up on the high turnover list for the day.

Friday was the last day of trading for the month of September with a noticeable appreciation in both the indices being witnessed. The ASPI gained 22 points, its highest single day gain for the week, to close at 5972. The Milanka, as if not to be outperformed gained 71 points to close at 5645. A turnover of Rs 2 billion was logged owing mostly in part to nearly 6.4 million shares of Commercial Bank changing hands. However a significant net foreign outflow of Rs 247 recorded today. John Keells, Dumanis Capital, Dipped Products and Touchwood were among the top contributors headed by Commercial Bank. Top gainers for the day included Touchwood, Lake House Printers and Sathosa Motors gaining 11%, 23% and 15% respectively.

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

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