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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2759

Downward stocks trend tumbles indices

By Quintus Perera – Asian Tribune

Acuity – the Stock-brokering arm of HNB and DFCC in their weekly review indicated that indices tumbled as stocks sustained a downward trend throughout the week on the back of sluggish investor sentiment. The weak corporate earnings results coupled with unsettled global equity markets continued to add pressure on the market while as a result, week on week the All Share Price Index (ASPI) ended 5.6 percent or 106.4 points lower at 1783.9 points while the more sensitive Milanka Price Index (MPI) closed down by 6.4 percent or 135.5 points at 1989.2 points.

The banking stock DFCC accounted for 38 percent of market turnover during the week supported largely by Friday’s crossing, which amounted to Rs.360 million, based on 4.4 million shares that went through at a price of Rs.82 per share. The share fell by a notable 9.8 percent against its week’s opening to close at Rs.83 per share, after trading between a price range of Rs.82.25 and Rs.85.50 per share.

Another stock which came among the top contributors during the week was Sunshine Holdings which had over 1.0 million shares traded during the week, adding closer to Rs.129.8 million to the week’s turnover. Sunshine Holdings on Monday saw a large deal consisting 1 million of its shares changing hands at a price of Rs.125 per share, which constituted almost 73 percent of the day’s turnover. The share price of Sunshine Holdings witnessed a marginal increase of 0.2 percent for the week to close at Rs.125.25 per share.

Ceylon Cold Stores was a yet another stock that saw a crossing taking place during the week. On Friday 0.7 million shares of Cold Stores changed hands at Rs.135 per share amounting to a total turnover of Rs.93.1 million becoming the 3rd highest contributor towards weekly turnover. WoW the share price of Cold Stores picked up by 22.7 percent.

Distilleries saw its share dipping 5 percent WoW to close at Rs.52.25 per share after fluctuating within a price band of Rs.52 and Rs.57 per share for the week. The stock’s total contribution towards the week’s market turnover amounted to Rs.50.7 million while the total number of Distilleries shares traded during the week amounted to nearly 1 million.

Activity levels were low during the week except on Friday, which posted almost twice the turnover of the first three days (The week was restricted to four trading days), prompted largely by the crossings on DFCC and Cold Stores. Total weekly turnover for the week thus showed a 41.3 percent increase to amount to Rs.940 million while the average daily turnover stood at Rs.133 million showing a 76.6 percent improvement compared to last week.

Foreign input was virtually unseen during the first three days of trading as foreign participation of total activity stood at a mere of 1.5 percent. However with Friday’s heavy foreign activity the participation level jumped up to 27.0 percent for the week. Foreign purchases and foreign sales respectively showed a 191.7 percent and a 104.7 percent improvement to stand Rs.387.1 million and Rs.121.0 million for the week. The resultant net foreign inflow was Rs.266.1 million for the week, up by a massive 261.5 percent.

The highest traded stocks during the week were Nawaloka, DFCC, Vallibel and Sierra Cables.

Meanwhile Acuity in its point of view indicated that the sentiment would remain negative amidst gloomy earnings outlook and indices slipped throughout the week as cautious investors remained on the sidelines. During the week All Share Price Index (ASPI) lost 5.6 percent while the Milanka Price Index (MPI) shed 6.4 percent compared to last week’s closing levels.

Acuity indicated that they do not expect the sentiment to get a boost amidst dismal corporate earnings outlook. Most companies witnessed their profits shrinking in the back of reducing margins and in our opinion the pressure on earnings would continue in the short to medium term with interest rates and inflation still remaining high. Thus they advise investors to adopt a cautious approach as a result of weak fundamental outlook on equities.

- Asian Tribune -

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