Sunday, January 6, 2013

Weekly Market Focus

The drop in police rates helped to boost interest on equities whilst foreign continued to pick up shares of blue-chips. Banking & Financial and John Keells were the top picks for foreigners whilst high dividend yielding counters saw their prices soar. Retail activity picked up this week in anticipation of a positive turnaround. The positive momentum can be expected to pick up further as the “herd effect” would gather momentum.

Market traded on a mixed note on Monday with Nestle and Ceylon Tobacco Company touching all-time highs. Activity was dominated by blue-chip counters although retail push was seen on selected penny stocks. The year to date drop in the All Share Price Index is approximately 7.1% which is relatively better than the previous year’s drop. ASI gained 35.87 points (+0.6%) to close at 5,643.00, MPI lost 1.08 points (+0.02%) to close at 5,119.09 and the S&P SL20 index gained 16.34 points (+0.5%) to close at 3,085.33. Turnover was Rs. 289.3m

The New Year started on a strong note as a further reduction in yields of treasury bills helped to create excitement. Retail activity picked up on Wednesday which helped to boost sentiment to some extent whilst institutional interest on Commercial Bank bolstered turnover. Commercial Bank contributed 85.3% of total market turnover. Indices closed higher helped by a late surge in retail participation as the All Share Price Index was in negative territory in early trading. Whilst a positive trend could be expected, we encourage investors to base their buying decisions on the fundamentals and prospects of the company. ASI gained 40.79 points (0.72%) to close at 5,683.79, S&P SL20 index gained 5.55 points (0.18%) to close at 3,090.88. Turnover was Rs. 1,677.0m.

Positive momentum was seen on Thursday with retailers increasing their presence. Gains on Ceylon Tobacco Company helped to bolster the indices whilst Hatton National Bank and John Keells Holdings contributed well to turnover. People’s Leasing & Finance attracted retail interest as a merger with its subsidiary is round the corner. ASI gained 46.66 points (0.82%) to close at 5,730.45 and the S&P SL20 index gained 13.37 points (0.43%) to close at 3,104.25. Turnover was Rs. 518.6m.

Retail activity picked up towards the latter part of trading on Friday with Hatton National Bank, John Keells Holdings and Asiri Surgical providing substantially to turnover. Indices were almost flat in early trading but picked up as momentum gathered with retail interest seen on counters such as Pan Asian Power, Free Lanka Capital Holdings and People’s Leasing & Finance. There seems to be an overall improvement in sentiment in the market as conditions have relatively changed for the best.

Blue-chips such as Ceylon Tobacco Company, Chevron Lubricants and Lion Brewery achieved their 52 week highs today which indicate that foreign buying is very enthusiastic.

ASI gained 17.26 points (0.30%) to close at 5,747.71 and the S&P SL20 index gained 17.46 points (0.56%) to close at 3,121.71. Turnover was Rs. 1,234.4Mn. Top contributors to turnover were John Keells Holdings with Rs. 530.6m, Hatton National Bank with Rs. 325.4m and Asiri Surgical with Rs. 161.4m. Most active counters for the day were Panasian Power, Free Lanka Capital Holdings and Nation Lanka Finance.

Notable gainers for the day were Panasian Power up by 15.4% to close at Rs. 3.00, Ceylinco Insurance up by 8.0% to close at Rs. 939.90 and Tess Agro up by 8.0% to close at Rs. 2.70. Notable losers for the day were PC House down by 3.5% to close at Rs. 5.50, Colombo Land & Developments down by 3.0% to close at Rs. 36.10 and Swarnamahal Financial Services down by 2.70% to close at Rs. 3.60.

Cash map for today was 61.71% which is a marked improvement from yesterday. Foreign participation was 52% of total market turnover whilst net foreign inflow was Rs. 418m.

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