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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2640

Dullness in the Stock market continues

By Quintus Perera – Asian Tribune

The dullness at the previous week continued this week too, according the the Weekly Review of the HNB Stockbrokers resulting from a low retail participation in the market. All Share Price Index (ASPI) and Milanka Price Index (MPI) dropped by 16 points and 41 points this week to close at 2572 points and 3584 points respectively.

Commercial Bank managed to become the highest contributor towards market turnover this week eclipsing JKH, which managed to consistently secure the top position over the last few weeks. A significant 3 million Commercial Bank shares were seen trading on Wednesday alone with the Counter contributing Rs.412.7 million towards the total market turnover for the week. The share traded during the week within a range of Rs.135.75 and Rs.131. The Counter closed the week at Rs.135, gaining 3 percent during the week.

Controlling stake of 75 percent in Walker & Greig Ltd changed hands this week at a price of Rs.5.75 per share. The share price of Walker & Greig gained 21 percent during the week to close at Rs.7.25. The Counter contributed Rs.82.5 million towards weekly turnover while trading within a range of Rs.7.5 and Rs.5.75.

SLT managed to secure the third place this week in market turnover rankings contributing Rs.80 million towards weekly turnover. SLT traded within a thin range this week of Rs.37.25 and 36.50. The Counter lost 1 percent from it’s last week’s closing price to close this week’s trading at Rs.36.50.

A significant stake in Dankotuwa Porcelain (DPL) traded on Friday contributing Rs.69 million towards the day’s market turnover. During the week DPL shares generated a turnover of Rs.71.8 million while trading within a range of Rs.11 and Rs.8.50. The Counter closed trading for the week at Rs.10.25 up by 14 percent from last week.

Total market turnover for the week stood at Rs.938 million and average daily turnover for the week stood at Rs.187 million, which remained flat from last week. Foreign investors continued to remain net buyers though foreign inflows showed a 67 percent
decline from last week to amount to Rs.183.9 million. Foreign purchases for the week amounted to Rs.662.7 million marginally up from last week while foreign sales amounted to Rs.478.8 million showing a significant increase of 439 percent. Total foreign participation as a percentage of total market activity stood at 61 percent up from 39 percent witnessed last week. Walker & Greig, Dankotuwa Porcelain, Commercial Bank, SLT and Dialog were among the highest traded stocks for the week.

Meanwhile in their point of view, HNB Stockbrokers indicated that as expected by them, market remained weak during this week with both indices moving to negative territory. The activity levels also remained relatively low with retailers continuing to adopt a wait and see approach. Overall the market shed 16.7 points during the week compared to previous week’s closing levels.

Inflation eases to 17 percent in June

The annual average inflation measured by Colombo Consumer Price Index (CCPI) declined to 17 percent in June compared to 17.4 percent recorded a month ago while the Point to Point inflation eased to 13 percent compared to 13.7 percent in May.

The June CCPI stood at 5344.3 points up by 167.9 points or 3.24 percent compared to May CCPI. The increase in the index during June was mainly due to the rise in food index. Out of the total CCPI increase 3.20 percent was due to increases in food items such as vegetables, bread, dried fish and coconut oil. The rise in other categories such as fuel, clothing and miscellaneous was insignificant.

In July 2007 we expect the annual average inflation to remain at similar levels of around 17%, furthermore we expect a slowdown in inflation during the remaining part of the year after it peaked in April 2007. However according to HNB Stockbrokers’ forecast inflation in December 2007 would remain higher than what was recorded in the corresponding month of last year.

Foreign buying to continue

They expect the market to remain dull with retail activity likely to be low during the coming week. However continuous foreign buying they witnessed over the last 6-8 weeks is likely to continue and counters such as JKH, SLT and Dialog are likely to be in the interest of the foreign investors.

- Asian Tribune -

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