Monday, June 3, 2013

Mixed week for bourse

Stock Market Review for the Week Ended 31st May 2013:

Colombo Bourse has displayed mixed signals during the week ended 31st May while hovering around the 6,500 ASI figure. Towards mid-week we witnessed the market recovering from its initial movement with turnover rising to its highest on Thursday in more than three weeks as conglomerate Hemas Holdings PLC bought a majority stake in pharmaceutical firm J. L Morrison Sons and Jones PLC.

To re-cap, starting from Monday; the Colombo Bourse slipped from a 19 month high on profit taking as the main ASI index dropped by 42.31 index points (0.65%) to close at 6,446.54 and S&P SL 20 Index lost 24.13 points to close at 3,641.91. Market turnover for the day was recorded at LKR 697mn whilst the market capitalization for Monday was LKR 2476 bn. Foreign participation was comparatively low and it calculated for 14.8% of the total market activity with a net inflow of LKR 113mn as the market turnover was recorded at a dismal LKR 553mn.

ASI lost 11.84 points and closed at 6,434.70 while the more liquid S&P SL 20 Index lost 14.95 points and closed at LKR 3,626.96 on Tuesday. Foreign participation remained sluggish and accounted for 12.7% as Tuesday ended while a net inflow of LKR 75mn was recorded for the day. Market capitalization for Tuesday stood at LKR 2413 Bn.

Colombo Stock market headed towards a recovery on Wednesday as the main index ASI rallied ahead by 21.11 points to close at 6,455.81 and S&P SL 20 Index advanced by 17.68 points to close at 3,644.64. Daily market turnover was LKR 906mn as foreign participation for the day was 21% of the total market activity as investors continued to act as net buyers with a net inflow of LKR 102mn.

Colombo Bourse on Thursday mimicked Wednesday’s ASI figures with ASI closing at 6,455 points and the S & P SL 20 index declining marginally to close at 3,640 points. Daily market turnover was a staggering LKR 2.55 Bn, an increase by 182 % from the previous trading day. Market capitalization stood at LKR 2478 Bn as a net foreign inflow of LKR 165 Mn was recorded for the day, an increase of over 60% from Wednesday. Ceasing trading for this week the Colombo Stock Exchange edged up 7.94 points on the main ASI index closing at 6,463.06 points while the more liquid S &P SL 20 increased by 6.28 points to close at 3,646.32. Market turnover for the day was recorded at LKR 731 Mn while foreigners remained as net buyers for the day with a net foreign influx of LKR 118 Mn.

Subsequently on Monday, the Colombo Bourse market capitalization depreciated by 1% due to profit taking by investors after a two-day consecutive growth experienced during the previous week. Investors booked profits in small volumes while lacklustre trading was made on blue-chips. Price depreciation was witnessed in Index heavy counters such as Dialog Axiata by LKR 0.40, Nestle by LKR 21.50 and John Keells Holdings by LKR 4.80 contributing to the negative market sentiment.   Overseas Reality, Chevron Lubricants and Ceylinco Seylan Development were among heavily traded stocks during the day.

The Banking, Finance and Insurance sector contributed to drag the Colombo Stock Exchange down to a near one week low as investors were engaged in profit taking from recent gains in banking shares. Price reductions in index heavy stocks such as Bukith Darah by LKR 13.90, Carsons by LKR 2.50 and Commercial Bank by LKR 1.00 contributed negatively to the prevailing negative sentiment.

 Market giant John Keells Holdings however edged up by 0.3% to close at LKR 289.00 as posted a 23% gain in its March quarterly earnings. Colombo Land & Development with LKR 42.5mn topped the turnover list today as Central Investment & Finance, Overseas Reality and Morisons non-voting were among the heavily traded stocks.

Indices gradually turned the Colombo Bourse back to green on Wednesday despite a few dips. Foreign investors displayed a selling sentiment due to Nation Lanka Finance (CSF) foreign stake in the counter reduced by 1,335,470 shares; as the price of the counter gaining 17% closed at LKR 11.70. Nation Lanka inevitable topped the turnover list adding LKR 107 Mn to the daily turnover whilst dominating the volumes list with 9.2 Mn shares.

Indices continued to fluctuate for the day on Thursday while transactions pertaining to J.L Morrison Sons and Jones (MORI) captured 61% of total turnover as the price closed at LKR 346.20 gaining 10.71%. MORI managed to strike the deal through eight crossings as Hemas Holdings PLC was rounded up as the majority stakeholder. Foreign interest was witnessed in Lanka Floor Tiles whereas the foreign stake in said counter increased by 1,166,400 shares. On Friday, notably Chevron Lubricants appreciated in value by 3.41% to close at LKR 331. Banks, Finance and Insurance sector contributed most to the daily turnover by contributing LKR 219 Mn for the day. Several crossings by Commercial Bank, Aitken Spence and Lanka Floor Tiles aided to the total turnover while Chevron Lubricants touched its 52 week high on Friday closing at LKR 328.30.

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

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