Sri Lanka: Indices remain high

Acuity Stockbrokers (Pvt) Ltd in their market review indicated that stocks rose modestly on early trading amidst the uncertain outcome of the presidential election.

The growth trend continued even after poll results were announced on Thursday pushing All Share Price Index (ASPI) to breach the previous high held on Friday. The ASPI ended the week with a gain of 3.0% or 104.7 points at 3636.4 points while the Milanka Price Index (MPI) rose by 3.4% or 137.0 points to close at 4181.8 points on Friday.

JKH was the highest contributor to the week’s turnover, contributing approximately Rs.533.0 million, witnessing active trading throughout the week. JKH volumes for the week stood at 3.1 million, improving substantially compared to 1.8 million traded last week. The counter closed at Rs.176.50 per share, with the share price appreciating by 1.6% Week-On-Week.

Apart from the above, Touchwood and Commercial Bank (COMB) contributed considerably to the week’s turnover. Touchwood contribution was approximately Rs.400.0 million and COMB was Rs.344.0 million to the total turnover, with approximately 3.6 million Touchwood and 1.9 million COMB shares trading respectively during the week. Both counters saw major portion of their volume, being traded on early part of the week. Touchwood saw its price appreciate significantly by 24.7% to close at Rs.116.25 per share this week, while COMB ended the week at Rs.190.25 per share up by 2.8% Week-On-Week.

Environmental Resources (GREG) gained renewed retail interest this week, resulting in 1.3 million of its shares trading for the week with high interest seen on Friday. The counter contributed Rs.167.6 million while trading within a wide range of Rs.117.00 and Rs.136.00 per share for the week. The share price appreciated by 12.6% compared to last week, to close at Rs.134.00 per share.

Turnover for the week totaled Rs.4.3 billion this week, falling by a moderate 29.0% compared to last week due to trading being limited to two and a half days for the week. Conversely, average daily turnover for the week increased by 18.4% to Rs.1.4 billion during the week.

Foreign investors remained net sellers for yet another week, standing at a net amount of Rs.1.0 billion. The month of January saw high foreign sales amounting to a total of Rs.2.9 billion net foreign outflows. Total Foreign purchases for the week stood at Rs.443.6 million, while foreign sales totaled to Rs.1.5 billion. Foreign participation was high at 22.2% of total activity, compared to last week’s participation level of 16.4%.

Among the highest traded stocks during the week were Seylan Merchant (Non Voting), Kshastriya Holdings, Seylan Merchant and Seylan Bank (Non Voting) and Lanka Cement.

ASL In their point of view indicated that the two and a half day traded week ended 28.01.10 saw the ASPI moving 104.7 points (2.96%) up. With the said climb the ASPI has reached a level of 3636.4; the biggest contribution for the climb came from today’s trading (contributing to the tune of 45 points up).

The market has been moving based on sentiments prior to the elections, and the first day of trading subsequent to the elections saw the bourse pushing further up. As mentioned repeatedly on previous “Weekly Reports”, the bourse seems to be entering “Overheated” territory (based on fundamental grounds); surging at current levels.

Albeit, the market getting heated up (based on fundamentals), there are strong counters one could look to invest other than the overheated speculative counters. Based on a Sectoral perspective; sectors such as banking and plantation still remains to be undervalued. Hence they expect the investors to profit out on the over heated speculative stocks.

- Asian Tribune -