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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2463

Investors reacting to escalating violence bring instability to stock indices

By Quintus Perera – Asian Tribune

Colombo, 06 August, ( The HNB Stock Brokers, Equity Research Team indicated volatility was witnessed this week with indices seesawing, showing a downward trend on one day and an upward trend on the other. Low market sentiments were driven by an upsurge in violence in the North and the East, with government forces trying to open the Mawilaru sluice gates, which are situated within LTTE controlled territory.

However subsequent to a downfall, investors were seen rushing back to the market leading to the up down scenario witnessed this week. The reluctance of investors to stay on the sidelines can be taken as a positive note, indicating investors were becoming more resilient towards adverse developments in the peace front.

Comparing Week on Week (WoW) both indices recorded a decline this week. The All Share Price Index (ASPI) fell by 20.9 points to close the week at 2205.7 points, while the Milanka Price Index (MPI) fell by 29.7 points to close at 2826.5 points.

Foreign interest in Dialog shares, led to the counter becoming the highest contributor towards turnover this week. Approximately 5.6 million of Dialog shares traded for the week, contributing Rs.118.6 million towards weekly turnover. The major part of 4.1 million of Dialog shares traded on Friday, witnessing both foreign purchases and sales. During the week the counter traded at a low of Rs.20 per share and a high of Rs.21.50 per share to close the
week unchanged at Rs.21 per share.

Several strategic trades were seen taking place during this week, with high net worth investor Dr.Senthilverl reportedly being on he buying side of many. On Wednesday both Lanka Tiles and Lanka Walltile saw sizable quantities of 1.6 million and 2 million exchange hands, with Dr.Senthilverl increasing his holding on the two stocks. Both counters combined managed to contribute a notable Rs.205.7 million towards Wednesday’s Turnover. Lanka Tiles traded within a range of Rs.65 and Rs.57 per share for the week, to close at Rs.64 per share. The counter showed a 6.7 percent WoW growth in the share price, contributing Rs.107.2 million towards weekly turnover.

Meanwhile Lanka Walltiles was seen trading within a range of Rs.50.75 and Rs.43.50 per share, with the share price recording a noteworthy 10 percent increase compared to last week. Contribution from Lanka Walltiles towards turnover for the week totaled Rs.102 million, while closing on Friday at Rs.48.50 per share. Total contribution from both stocks for the week amounted to Rs.209.2 million.

A 3.4 million quantity of banking sector counter, Nations Trust, traded at a price of Rs.22.50 per share on Monday, with Dr.Senthilverl reportedly showing interest in the counter. On
Monday the counter managed to contribute Rs.78.2 million, towards the day’s turnover with a total of 3.5 million shares trading.

During the week, the counter was seen trading between a range of Rs.24 and Rs.22.50 per share to close at Rs.22.75 per share. A total of 4.2 million shares traded this week, contributing Rs.95.1 million towards weekly turnover.

Penny counters; Vanik Incorporated and Nawaloka, which managed to dominate investor interest last week, experienced a receding of interest this week. For both the counters, quantities traded were far below levels witnessed last week. While Vanik was the highest
traded counter for the week, a low 17.9 million of Vanik shares traded this week compared to 51.4 million shares traded last week.

However the share price of the counter did managed to pick up by 13.1percent this week to close at Rs.4.90 per share, compared to last week’s close of Rs.4.30 per share. Nawaloka, which was the highest traded stock last week, with 70 million of shares trading, witnessed a mere 15.1 million shares trade this week. The share closed unchanged at Rs.3.20 per share on Friday.

Asiri Surgical remained amongst the top gainers this week, with its share price rising by 14.3 percent WoW. According to newspaper reports, strategic interest coming from Softlogic; the major shareholder in Asiri Hospital (parent company), resulted the appreciation in share price of Asiri Surgical this week. Around 7.3 million shares of Asiri Surgical shares were seen trading this week, with the share price of the counter reaching a high of Rs.6.25 per share and a low of Rs.5.25 per share.

Even amid a volatile market, activity levels managed to remain moderate with average daily turnover amounting to Rs.265.8 million. Around 30 percent of the total turnover came from large trades, which were spread across the week. Total turnover for the week amounted to Rs.1.3 billion down by 30.3 percent compared to last week’s turnover of Rs.1.9 billion.

Both foreign purchases and sales were boosted on Friday amid foreign participation being witnessed on Dialog shares. Foreign purchases for the week amounted to Rs.223.4 million, of which Rs.91.9 million came on Friday alone.

Meanwhile foreign sales amounted to Rs.221 million with the major part of Rs.121.5 million coming on Friday. Apart from the above stated trade in Dialog shares, foreign sales of LIOC shares also contributed towards the Rs.121.5 million recorded on Friday. The resultant net effect was a foreign inflow for the week amounting to just Rs.2 million. Foreign participation this week stood at a moderate 16.9 percent of total activity.

Volume wise highest traded stocks for the week included, Vanik Incorporated, Nawaloka, Asiri Surgical ,Vanik Incorporated (Non Voting), and Dialog.

- Asian Tribune -

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