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Monday, February 7, 2011

Bourse gains

Activity at the Colombo bourse remained at healthy levels this week as the ASPI soared upwards to close at 7346.81, an increase of 2.15 percent or 154.32 points from last week. While the MPI began the week slipping down but the third day of trading saw an increase in the index which closed at 7180.49, a marginal increase of 0.21 percent or 15.17 points increase from last week. The daily turnover average for the week was Rs 3.79 billion as against last week’s daily turnover average of Rs 3.88 billion a decrease of 2.3 percent.

The volumes traded witnessed an upward trend during the week, however the daily average volumes recorded at 107.89 million shares was a decrease as against the previous week’s daily average of 139.52 million shares. Market capitalization as at the end of the week stands at Rs 2,445.78 billon recording a 2.2 percent growth from last week’s close of Rs 2,393.47 billion. The bourse traded at a PE multiple of 21x and a PBV of 3x while last week’s multiples were 27x and 3.2x.

Banking, Finance and Insurance sector contributed 15.49 percent amounting to Rs 2.35 billion to total market turnover this week with investor interest in the insurance sector boosting turnover. The sector index recorded a 2.95 percent increase week on week to close at 17,433.30.

The Manufacturing, Diversified and Power and Energy sectors represent 14.7 percent, 14.5 percent and 13.6 percent of the total market turnover. Market activity, volume wise was also led by the Banks, Finance and Insurance sector amounting to 27.3 percent while Chemicals and Pharmaceuticals contributed 12.3 percent and Power and Energy led by Laugfs amounted to 11.8 percent of total volumes. Laugfs was the top turnover contributor this week accounting for 8.5 percent of total turnover amounting to Rs 1.28 billion. Laugfs posted Rs 327.5 million earnings for the quarter ended December 2010. Sunshine Holding closed the week representing 5.62 percent of total turnover

amounting to Rs 853.2 million. Dankotuwa recorded Rs 793.12 million representing 5.22 percent of turnover for the week. Top gainers this week were EB Creasy, with 35.76 percent increase in scrip price to close at Rs 3,122.50, Madulsima up by 35.07 percent to close at 28.50 and CIC (X) which gained 32.31 percent to close at 137.6. Other top gainers were Asian Alliance and CDB.

Union Assurance topped the list for Losers this week with the share losing 15.14 percent to close at Rs 162.50 from opening price of Rs 191.50 while Sinhaputhra Finance shed 12.16 percent to close at 127.8 from 145.50. PC House and Good Hope were other major losers for this week.

Foreign investors closed the week as net sellers recording total net selling of Rs 212.6 million as against the net selling of Rs 779.3 million recorded last week. Foreign purchases for the week were Rs 721.9 million compared to Rs 1.02 billion recorded last week on a full week, however daily average activity levels also record a decline. Foreign Sales for the week amount to Rs 934.5 million with a daily average of Rs 233.6 million a decline as against the previous week’s daily average of Rs 360.1 million. Mullers was the most traded share this week with more than 48 million shares changing hands representing 11 percent of total volumes traded this week, while Richard Peiris traded 32 million shares accounting for 8 percent of volumes traded and SMB Leasing (X) traded 26mn shares. Other

active shares on the bourse were Laugfs Gas and Ama Investor interest in mid caps continued into the week amidst active retail investor participation backed by the corporate earnings released during the last two weeks.

Foreign investors have remained net sellers during the first five weeks of 2011 amounting to total net selling of Rs 2.87 billion while the corresponding period in 2010 records net selling of Rs 4.09 billion.

We expect the current momentum to continue into the week ahead with retail investors driving the market, while sound corporate results will boost investor sentiment.