Monday, January 21, 2013

Markets rebounds with ASPI recording a rise

Markets rebounded this week with the ASPI recording a 2.25% rise (or 129.28 points) over the four-day week relative to last week's marginal decline of 0.02% to close the week at 5875.77 points. The S&P SL 20 Index gained 1.29% (or 40.49 points) to close the week at 3174.36 points.

Commercial Bank contributed 23.19% to the week's total market turnover value, making the stock the highest contributor to this week's turnover value. The counter contributed Rs. 974.43 million while Distilleries Company accounted for 15.93% (or Rs. 669.37 million) of total market turnover value.

JKH - which contributed Rs. 493.52 million (or 11.74%) - was the third highest contributor to total market turnover over the week. Despite the holiday-shortened trading week, total market turnover value amounted to Rs. 4.20 billion, an increase of 10.73% compared to last week's value of Rs. 3.80 billion. The daily average turnover value for the week amounted to Rs. 1.05 billion, increasing 38.41% from last week's daily average of Rs. 759.12 million. Market Capitalization meanwhile increased 1.17% (or Rs. 25.88 billion) to Rs. 2232.71 billion from last week's value of Rs. 2206.83 billion.

On a sectoral level, the Banking and Finance sector was the highest contributor to the week's total market turnover value, accounting for 37.88% (or Rs 1.60 billion) of the market, helped primarily by Commercial Bank (which accounted for 61.21% of the sector turnover). The diversified sector trailed behind with a contribution of Rs. 930.82 million to account for 22.15% of total market turnover value. The Beverage Food and Tobacco sector meanwhile was the third largest contributor to the week's turnover value. The sector - backed mainly by Distilleries Company accounted for 21.05% (Rs. 884.70 million) of total market turnover.

In terms of share volume, the Banking and Finance sector was the biggest contributor this week, accounting for 28.63% (or 37.38 million shares) of the market's total trades for the week. The Diversified sector contributed 18.85% of the total traded volume as 24.60 million shares were traded while 18.93 million shares in the Telecom sector changed hands, accounting for 14.5% of the week's turnover volume. Equity Two was the highest price gainer for the week with a W-o-W gain of 17.32% to close at Rs 29.80, compared to last week's close of Rs. 25.40. LMF gained 15.85% W-o-W to close at Rs. 125.00 while GS Finance gained 14.55% W-o-W to close at Rs. 630.00. Samson International and CFI were also amongst the top gainers for the week. The highest price loser for the week was Miramar with a W-o-W decline of 12.90% to close at Rs. 82.40, relative to last week's close Rs. 94.60. Autodrome declined 10.99% W-o-W to close the week at Rs. 801.00, while Harischandra closed at Rs. 2,424.80, representing a 10.03% decline over the week.

Foreign investors recorded a net buying position of Rs. 0.30 billion relative to last week's net selling position of Rs 0.12 billion, as daily average net inflows amounted to Rs. 75.31 million, relative to last week's daily average net outflow of Rs. 23.17 million. Daily average foreign purchases amounted to Rs. 0.50 billion relative to Rs. 0.35 billion recorded last week (41.96% W-o-W increase), while daily average foreign sales amounted to Rs. 0.42 billion relative to last week's average of Rs. 0.37 billion.

In terms of volume, Distilleries and Softlogic Holdings led foreign purchases, while Commercial Bank and Dialog led foreign sales. In terms of value meanwhile, Distilleries and JKH led foreign purchases while Commercial Bank and Dialog led foreign sales.

Point of View

Markets regained traction this week with the ASPI recording consecutive gains to close up 129.3 points W-o-W. Volumes hit a 7-week high of Rs. 2.0 billion on Thursday with large block trades in selected blue-chips (Distilleries, Commercial Bank and Aitken Spence) accounting for 46.9% of total daily turnover. Consequently, daily average turnover increased 38.4% (W-o-W) to Rs. 1.1 billion , pushing the Y-T-D average up to Rs. One billion . Foreign investor activity too bounced back significantly from last week's net selling position to record a weekly net inflow of Rs. 0.3 billion .

Positive momentum is likely to continue in the week ahead amid continued buying interest by foreign and institutional investors.

The Central Bank on Thursday reiterated its monetary policy stance, retaining the policy rate changes adopted in early December (Repo rate-7.50%; Reverse Repo-9.50%). The CB added that easing pressure on inflation (9.2% Y-o-Y in December cf. 9.5% in November) and broad money growth (18.2% Y-o-Y in November cf. to 20.6% Y-o-Y last year) justified its current loose monetary policy stance. The Bank also added that pressure on the trade deficit eased further in December and that the Sri Lankan Rupee appreciated 5.3% against the USD during H2 2012. Meanwhile, the World Bank projects Sri Lanka's 2013 GDP at 6.8% Y-o-Y while estimating overall 2013 growth in the South Asian region at 5.7%.

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