Stock Market Review for the Week Ended 17th May 2013:
The Colombo bourse closed 2.09 percent higher from the previous week with S&P SL20 gaining 1.65 percent. A net foreign inflow of Rs. 1.58 billion was recorded during the week, with year-to-date net inflows amounting to Rs. 11.18 billion.
Current market sentiments are heading towards further optimism mostly due to prevailing low interest rates along with world markets performing significantly well. We may continue to see foreigners bulk-up on blue chips with retailers following suite.
After a reaffirming previous week, the Colombo Bourse witnessed a gradual decline on Monday slowing down the market rally. Both indices were in the red zone where the ASPI declining by 1.80% to close at 6,239 points while the more liquid S&P SL20 index lost 0.34% to close at 3,519. A slight recovery was witnessed towards the end of Monday but was insufficient to close the indices green.
Total turnover for the day was recorded at a disappointing 535 Mn- a decline of 63.7% from Friday.
JKH proved to be the highest contributed to the turnover capturing 23% of total. Price of JKH closed at LKR 269.90 (+0.60%) while the foreign stake of the counter increased by 427,143 shares.
Softlogic Holdings PLC and Vallibal One PLC held the second and third respective spots turnover contribution-wise while the Diversified Holdings sector contributed mostly to the market turnover with a rise in sector index by 0.28%. Incidentally, the Banking, Finance and Insurance sector lost 0.86%. Foreign investors continued their interest displaying a buying sentiment, while the net foreign inflows amounted to LKR 153 Mn for the day.
Colombo Bourse Indices continued with its downward trend for the second consecutive day on Tuesday as retailers took up to go on a selling streak. The main index fell 0.52 % (32.44 points) to close at 6,207 points on its second day of losses while the S & P SL 20 index also declined 0.52% to close at 3,501 points. The market turnover for the day improved from Monday by 19% to record 6,207 Mn where JKH was yet again the highest contributor to the overall market turnover capturing 16% of the total. Consequently National Development Bank and the Nations Trust Bank ranked hotspots in the turnover scale as second and third highest contributors respectively.
However, Tuesday’s turnover was well below this year’s daily average of Rs 1.02 Bn. Top gainers for the day were Colonial Motors, Dimo and Sigiriya Village while Serendib Englineering Group, Harischandra and SMB Leasing were recoded as top losers for Tuesday. Foreign investors continued to lurk around as primarily as buyers with a net foreign in foreign inflow amounting to Rs 155 Mn extending the net foreign inflow for this year to Rs 9.9 Bn.
Market ended under mixed sentiments on Wednesday as most of the banking sector counters excluding Hatton National Bank and Seylan Bank witnessed drop in prices. Commercial Bank declined by LKR 1.10, Sampath Bank by LKR 2.00, and National Development Bank by LKR 4.10. In return, Investor interest was diverted towards Motor sector counters such as Colonial Motors rose by LKR 9.90, United Motors up by LKR 5.40 and Diesel & Motor Engineering increased by LKR 4.60 at market closing. The main ASPI advanced by 14.53 points to close at 6,221.12 while S&P SL 20 Index dropped by 2.16 points to close at 3,498.34. The total market turnover bounced back and was recorded at Rs 1.7 Bn, an increase of 166% from Tuesday. Top contributors to the turnover were John Keells Holdings by LKR 443.4mn, National Development Bank by LKR 379.4mn and United Motors by LKR 123.8mn and subsequently, the Bank Finance Insurance, Diversified Holdings and Motors sectors arose as notable contributors to Wednesday’s turnover. Foreign participation at the end of the day amounted to 39% from total market activity while a net foreign inflow of Rs 859.9 Mn.
The Colombo Bourse on Thursday witnessed a surge in confidence as a continuous upward trend was witnessed throughout the day mostly driven by large-cap counters regaining their institutional, high net-worth and foreign interest and low interest rates. The total Bourse value rose by Rs 30 Bn hitting a one and a half year high on Thursday where we saw market capitalisation surpass the Rs 2.4 Tn.
ASI peaked an 18 month high with a 1.1% (65.88 points) increase to 6,287 while the S&P index increased by 0.9% (33.03 points) to close at 3,531.37. Market turnover for Thursday reached Rs.1.9 bn, out of which 62% was accounted by crossings by Piramal Glass, Aitken Spence, Dialog and Commercial Bank. Top contributors to the turnover were Aitken Spence (Rs.1.0bn), Commercial Bank (Rs.153mn) and Piramal Glass (Rs.76mn). Foreigners maintained their position as net buyers with an inflow of Rs.85mn. Notably, foreign participation accounted for 66% of the turnover while net inflow was seen on counters such as Piramal Glass, Dialog and John Keells.
The market opened on Friday displaying a buoyant, positive outlook throughout the day. We witnessed a surge in the main index ASI by almost hundred (93.70) points, a gain of 1.5% to close at 6,380.70 points. The more liquid S & P SL 20 index rose by almost sixty (57.89) points, an increase by 1.63% to close at 3,589.26 points. Market turnover for the day surpassed Rs 1.4 Bn for the second consecutive day with the overall market sentiment heading towards a positive direction. The total turnover was aided through several crossings by Dialog, Commercial Bank and HNB. Consequently, the Banking, Insurance and Finance sector index regaining its momentum from an increase of 1.4% contributing the highest percentage to the overall turnover. Foreigners continued their buying spree for the week with a net foreign inflow of Rs 335 Mn recorded for Friday.
In the backdrop of this prevailing positive market sentiment, we are particularly bullish on TJL, Textured Jersey Lanka, NTB and Access Engineering. With constructive earning growth levels, TJL is the newest addition to the billion dollar profit league with their FY13 net profit levels surpassing the Rs 1 Bn milestone- a 62% increase year-on-year. TJL also maintained a generous dividend policy and paid out an interim dividend of 0.66 per share in March 2013. NTB has maintained solid margins based on their first quarter results released recently with a net interest income loan growth of 21% and a moderate loan growth of 6% quarter-to-quarter.
(Courtesy: Innovest Investments (Pvt) Ltd – an Investment Management Company licensed by the Securities & Exchange Commission of Sri Lanka)
source - www.island.lk
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