By Quintus Perera – Asian Tribune
Acuity – the stock brokering arm of HNB and DFCC in their weekly review indicated that the week started off on a negative note as profit taking dragged indices lower following last week’s healthy gains. Nevertheless market bounced back on Wednesday after two consecutive days of losses fuelled by falling rates on government securities subsequent to Central bank’s rate cuts last week.
Indices closed the week almost flat with All Share Price Index (ASPI) dropping 6.6 points or 0.36% to 1838.5 points while the liquid Milanka Price Index (MPI) ended 8.2 points or 0.41% lower at 1963.1 points.
JKH retained its dominance in the marketplace contributing Rs.109.5 million to this week’s market turnover, amounting to almost 22.0% of total turnover. The JKH share remained slightly volatile during the week with price fluctuating between Rs.66.50 and Rs.72.50 per share. The total JKH volume for the week amounted to 1.6 million shares and the price picked up by a noteworthy 5.9% Week on Week (WoW) to close at Rs.72.00 per share.
Renewed interest was seen on Hotel Services (SERV) this week in the midst of an announcement regarding a sub division of company’s shares. A total of 0.5 million SERV shares traded for the week with bulk of the volume coming on Wednesday. The counter contributed Rs.77.3 million towards weekly turnover, while it’s share price moved lower this week by 11.9% to end the week at Rs.149.75 per share on Friday. The share price of SERV hit a high of Rs.160.75 per share while trading at a low of Rs.145.00 per share for this week.
The high cap Ceylon Tobacco (CTC) was also among the top contributors for the week, with the counter generating a turnover of Rs.32.4 million. The CTC shares closed 4.8% up WoW at Rs.115.00 per share after 0.3 million shares changed hands during the week.
Nations Trust contributed Rs.20.5 million towards weekly turnover, with a modest 0.7 million shares trading for the week. The counter traded at a highest price of Rs.30.25 and a lowest of Rs.28.00 per share during the week, closing 0.1% up at Rs.29.25 per share on Friday.
Activity levels reduced by 64.2% WoW to Rs.500.8 million this week while the average daily turnover amounted to Rs.125.2 million down from Rs.279.8 million posted last week.
Foreign investors continued to be net sellers, totaling Rs.58.3 million for the week. Both Foreign purchases and foreign sales were significantly lower this week. Foreign purchases stood at Rs.62.1 million, down by 55.0% compared to last week, while foreign sales amounted to Rs.120.4 million declining by 79.5% compared to last week. This week’s foreign participation stood lower at 18.2% of total activity compared to 25.9% last week.
The most actively traded stocks during the week were Sierra Cables, JKH, Piramal Glass and Tokyo Cement.
In their point of view Acuity indicated that the profit taking caused indices to move in to negative territory after last week’s sharp gains. During the week the market declined by a marginal 0.4% compared to previous week on relatively low volumes.
They expect the sentiment to turn positive in the coming week, as recent fall in interest rates have considerably improved the valuations of equities, nevertheless as they saw during this week profit taking would continue at regular intervals putting pressure on the indices. Considering the fall in interest rates and the possible end to the war soon Acuity advise investors to keep accumulating undervalued stocks with a medium term view.
In their economic update Acuity indicate that Sri Lanka’s point-to-point inflation as measured by CCPI N index declined to 2.9% in April with official data not showing any pressure on prices during the festival month.
Prices dipped 0.5% in April from on a month-on-month basis, maintaining the unbroken trend for the seventh consecutive month. The food and beverages sub-index fell by 1.0% from a month ago, although other sub indices barely changed from the levels prevailed at the end of last Month. The moving average inflation by the end of April stood at 16.7%.
While lower commodity prices have helped containing supply side pressures on inflation, the continuous decline in price levels Acuity believe also indicates subdued consumer spending amidst slowing economic growth. These conditions in their opinion would largely prevail in the medium term thus; inflation can come down further in the coming months.
However, the relatively sharp depreciation of the rupee seen in recent weeks could bring about a degree of imported inflation, while easing monetary policy would also begin to weigh on prices with a lag towards the latter part of the year. Their projections for May 2009 indicate point-to-point inflation falling to 1.4% while annual average inflation is estimated at 14.6%.
- Asian Tribune -
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