Monday, October 8, 2012

Investors searching for solid fundamentals

Stock Market Review for the week ending 05th October 2012:

Investors were on the search for stocks that demonstrated solid fundamentals and displayed the potential for price increases and buying was thus confined to counters that included LOLC up 13.1% to close at Rs.57.10 on a quantity of 11.5m shares, Aitken Spence up 4.7% to close at Rs.135.00 on a quantity of 2m shares. Despite, marginal declines investor buys also included 8m shares in Sampath Bank closing 2% lower at Rs.211.20, and JKH closed at Rs.216.40 drifting lower in price by 5.5% on a volume of 2m shares.

Trading for Monday ended with profit taking bringing down the indices to close in the red after the ASPI briefly surpassing the 6000 point benchmark in the early hours of trading. Market turnover of Rs. 1 billion was generated via continued foreign institutional activity in Dialog, LOLC and John Keells Holdings. The top traded counters for the day were Dialog contributing Rs.191 million, Touchwood with Rs.146 million and LOLC generating Rs.113 million. Retail buying interest was also witnessed in Access Engineering and Environmental Recourses Investments and Valibel One with the counters gaining in price. A net inflow of funds was recorded with foreign purchases amounting to Rs.373 million whilst foreign sales amounting to Rs. 262 million.

On Tuesday both indices continued to lose ground with the ASPI posting a 35 point loss to close at 5928 and Milanka posting a loss of 55 points to close at 5576. A very lacklustre turnover of Rs 747 million was recorded aided by institutional and high net worth interest witnessed in Touchwood and LOLC with both counters generating the highest turnovers for the day of Rs. 113 million and Rs. 105 million respectively. Touchwood closed up 2% at Rs. 19.10.

The All Share Price Index dipped 37 points to close at 5,890 and the Milanka dipped 53 points to close at 5,523 with continued profit taking being a toll on the positive market sentiment experienced in recent weeks. However a market turnover of Rs. 3 billion was recorded with a fresh round of foreign and local institutional interest being witnessed in selective blue-chip counters. Sampath Bank was the top contributor for the day, contributing around 56% of the day’s turnover. John Keells Holdings, Atiken Spence and Lion Brewery were the other top traded counters attracting both foreign and local investor interest. Continued interest in LOLC was witnessed with the counter closing up nearly 1%, at Rs. 51.00. A significant net inflow of foreign funds was seen during the day, with foreign purchases amounting to Rs. 1.2 billion whilst foreign sales amounted to Rs. 553 million.

On Thursday the market closed in the negative for the fourth consecutive session as both the ASPI and the Milanka lost 29 and 47 points respectively to close at 5861 and 5475. A moderate turnover of Rs. 565 million was recorded. LOLC closed the day at Rs.52.90 up by almost 4% and also contributing the highest turnover for the day followed by Commercial Bank, People’s Leasing and Lion Brewery. Amongst top gainers, Goodhope gained 14.8% to close Rs. 1390 and Harischandra gained 12.3% closing at Rs.2500.

After a four day negative trend, on Friday the market closed on a positive note with just only the ASPI gaining 18 points to close at 5879, while the Milanka closed in the red for the 5th consecutive day losing 9 points to close at 5466. A turnover of Rs. 551 million was achieved on Friday, and was the lowest for nearly a month. A net foreign outflow of Rs. 65 million was witnessed. LOLC, Sanasa Development Bank and John Keells Holdings were the top traded counters for the day with LOLC continuing to attract widespread investor interest. The counter closed at Rs. 57.10 gaining around 8%, while other noteworthy gainers with considerable turnover were AvivaNDB which appreciated by Rs. 29.50 gaining around 8% and Kandy Hotels closed higher by 7%.

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

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