Stock Market Review for the week ending October 26, 2012

Bourse struggles with dearth in liquidity

Trading for the week on Monday started on a subdued note with the market opening higher initially but closing lower with the ASPI and Milanka eventually declining. The ASPI & Milanka lost 95 and 46 points to close at 5553 and 5090 points respectively. Activity remained subdued with market turnover recording only Rs. 257 million which is the lowest recorded since mid-August. John Keells was the top contributor with a contribution of 15% to the market turnover supported by institutional and high net worth interest. Institutional interest in Chevron, Commercial Bank and Central Finance was witnessed.

On Tuesday, the market opened on a negative note and recovered during the day closing marginally higher. The ASPI gained 2 points to close at 5556, while the Milanka gained a point to close at 5091. Turnover levels improved recording Rs. 972 million with a 7% stake in Environmental Resources changing hands in at least three crossings. Substantial investor interest resulting in high activity in the warrants of Environmental Resources also witnessed. Continued investor interest in fundamentally strong counters such as JKH, Chevron and Asian Hotels was witnessed. A crossing of 362,000 shares in John Keells at a level of Rs. 208.00 marked investor confidence in sound blue chips.

The market opened higher on Wednesday but closing lower with the ASPI and Milanka shedding 13 and 15 points to close at 5543 and 5075 respectively. Turnover levels took a dip with only Rs. 291 million being recorded implying a dearth in liquidity paralleled by an increase in rising interest rates at the weekly issue of treasury bills. Interest in selective blue-chip stocks continued and included John Keells, Hatton National Bank and Commercial Bank. Commercial Bank was the top contributor followed by John Keells and Chevron. A net inflow of foreign funds was seen with foreign purchases amounting to nearly 45% of the day’s turnover.

Activities at the Colombo market saw an upside momentum in mid hours of trading on Thursday and both indices closed up. The ASPI increased by 33 points to close at 5,576 and the MPI gained 28 points to close at 5,104. The turnover for the day was Rs. 271.9Mn.

Top contributors to turnover were Chevron Lubricants at Rs. 31.6Mn, Distilleries at Rs. 22.5Mn and People’s leasing at Rs. 20.9Mn. Most active counters for the day were Environmental Resource Investments, Dankotuwa Porcelain and Nation Lanka Finance.

Chevron Lubricants became the top contributor towards the day’s turnover and activity on the counter was backed by foreign participation. Several block trades were witnessed among Balangoda Plantations which saw a 4.2% price increase and closing at Rs.37.41.

Environmental Resources also witnessed a significant price appreciation of 6.2% closing higher at Rs.15.46 driven largely by retail investor interest. Retail interest was also seen among counters such as SMB leasing (Voting and Non Voting), Blue Diamonds (Voting) and Lanka Orix Finance. A crossing of 100,000 DIST shares also concluded at Rs.145/-.

The market plummeted on the last trading day of the week as the ASPI fell by 25 points and the Milanka by 21 points to close at 5550 and 5082 respectively. The falling trend could be attributed to limited activity on the last day of the week as the turnover levels recorded was as low as Rs. 314 million. Ceylon leather recorded the highest turnover for the day and was seen to come from stocks that included JKH, HNB non-voting, Vallibel One and Chevron. The highest gainer for the day was Property Development achieving an impressive 12% increase closing at Rs.52.60.

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

source - www.island.lk