Sunday, January 20, 2013

Weekly Market Focus

The broader index managed to close in positive ground on Tuesday helped by gains on Ceylon Tobacco Company and John Keells Holdings. Turnover was dominated by premier blue-chip John Keells Holdings and a handful of leading banking & financial sector counters. ASI gained 3.75 points (0.07%) to close at 5,750.24 and the S&P SL20 index lost 0.97 points (0.03%) to close at 3,132.90.

Turnover was Rs. 727.7Mn.

Stocks rallied on Wednesday ahead of a meeting by the members of the Monetary Board to decide on the direction of the policy rates. Investors made early celebrations as yields on the treasury bills fell in today’s auction. Foreign investor favorites Chevron Lubricants, Ceylon Tobacco Company and John Keells gained good ground to help the indices close at its highest point so far this year. The resurgence of retail investors was also welcomed as many mid-capped counters gained notably.

ASI gained 62.23 points (1.08%) to close at 5,812.47 and the S&P SL20 index gained 28.86 points (0.92%) to close at 3,163.18. Turnover was Rs. 636.2Mn.

Blue chips led by Distilleries and Sri Lanka Telecom managed to make merry at the CSE on Thursday’s trading. Retailers continued to actively participate helped by a new wave of cash inflows into the stock market. However, blue chips continued to dominate in terms of turnover.ASI jumped 62.81 points (1.08%) to close at 5,875.28 and the S&P SL20 index gained 21.43 points (0.68%) to close at 3,184.61. Turnover was Rs. 2,049.4Mn.

On Friday, profit taking on Distilleries and few banking counters whilst at the same time retail interest on mid-capped counters outweighed each other as the broader market index managed scrape onto positive ground. Commercial Bank and Distilleries continued to witness institutional interest whilst a negotiated block trade took place on Hayleys. LOLC saw its shares actively and eagerly traded by the retail segment of investors. We witnessed the market losing steam towards the end of trading whilst trading began on a relatively slow note. ASI gained 0.49 points (0.01%) to close at 5,875.77 and the S&P SL20 index lost 10.25 points (0.32%) to close at 3,174.36. Turnover for today was Rs. 789.7Mn.

Top contributors to turnover were Commercial Bank with Rs. 273.3mn, Hayleys with Rs. 72.6Mn and Distilleries with Rs. 65.1mn. Most active counters for the day were LOLC, Lanka Orix Finance and Browns Beach Hotel.Notable gainers for the day were Parquet Ceylon up by 8.9% to close at Rs. 14.70, LOLC up by 8.2% to close at Rs. 66.00 and Browns Beach Hotel up by 7.4% to close at Rs. 20.40.  Notable loser for the day were Amana Takaful down by 5.9% to close at Rs. 1.60, Mullers & Phipps down by 5.6% to close at Rs. 1.70 and Kotagala Plantations down by 4.7% to close at Rs. 75.00.Cash map for today was 37.55% which is marked drop in buying momentum. Foreign participation for today was 25.6% of total market turnover whilst net foreign buying was Rs. 154mn.

Analyst’s note

The market showed signs of a bullish trend throughout the week. Market activity was well supported active foreign buying and local institutional activity. However, investors should be wary to get caught to the herd effect and emphasize on buying shares with relative value.

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