Market yet to pick up from holiday mood

STOCK MARKET: Trading was cut short this week, due to holidays restricting the number of trading days to 3.

Tuesday, which was the first trading day for 2007, saw some positive movement in the indices, with the ASPI climbing by 23.2 points and the MPI rising by a notable 48.4 points.

However the positive momentum failed to continue with the indices remaining stagnant on Thursday and falling modestly on Friday, leaving the market listless for yet another week.

Comparing Week on Week (WoW), the ASPI picked up by 17.2 points to close the week at 2739.6 points, while the MPI rose by a comparatively higher 31.3 points to close at 3743.1 points for the week.

Appetite on JKH shares retained this week with the share yet again managing to become the highest contributor towards weekly turnover.

The counter contributed Rs.141.3 million towards total turnover, with 724,600 shares trading for the week. During the week the counter managed to trade at a high of Rs.196.75 per share and a low of Rs.194.25 per share.

JKH closed the week at Rs.194.50 per share, showing little movement WoW. According to Bloomberg newswire, JKH is offering a 1:5 rights at a price of Rs.140 per share, while subsequent to the completion of the rights issue, a bonus of 1:7 will be offered.

Interest also remained on LIOC shares this week with its share price hitting a high of Rs.30.50 per share for the week.

Prices are set to rise further next week, with reports that the company has finally signed an agreement with the government, with regard to collecting its subsidy dues. During the week 2.3 million of LIOC shares traded, contributing Rs.67.9 million towards weekly turnover.

The share closed the week at Rs.29.50 per share up by 3.5% compared to last week.

Investors were also showing added interest on CIC this week, with the share price appreciating in both its voting and non-voting counters.

The non-voting counter saw its share price rise by 6.9% compared to last week to close at Rs.66 per share, while the voting counter showed a similar rise in price to close the week at Rs.104 per share.

A cumulative Rs.83.5 million was contributed towards weekly turnover, while 860,000 non-voting shares and a lower 262,800 Voting shares traded for the week.

Renewed interest was also seen in, banking counter NTB, with 1.7 million of its shares trading for the week.

NTB shares traded within a range of Rs.32.25 per share and Rs.28.50 per share this week, contributing Rs.51.3 million towards weekly turnover. WoW the share price appreciated by 9.7% to close the week at Rs.31 per share.

Total activity for the week amounted to Rs.813 million, while the average daily turnover this week amounted to Rs.271 million. Comparing average daily turnover levels, this week showed a moderate improvement of 17.7%, with last week's average daily turnover amounting to a lower Rs.230.2 million.

Foreign investors remain net sellers for the week amounting to Rs.141.7 million. Thus foreign sales remained higher amounting to Rs.204.7 million, while foreign purchases this week totaled Rs.63 million. Foreign participation fell this week to 16.5% of total activity compared to 27.8% last week.

Among the counters that took the forefront in term of trading volume this week were, Lanka IOC, NTB, SLT, Dialog and Vallibel.

The positive sentiment continued in the market during the week as investors looked to accumulate mainly key blue chip counters during the 1st week of the New Year.

However the activity levels remained low with the market been opened for only three days this week. Overall the market gained by 17.2 points during the week compared to last week's closing levels.

We do not expect a drastic shift in the market momentum during the coming week, thus the overall sentiment is likely to remain positive.

Furthermore the average daily turnover level that hovered around Rs.200- 300 million range during the past 3-4 weeks is likely to get a boost in the back of incr eased investor participation expected in the market.

Nevertheless we do not rule out the possibilities of volatility in indices, which would provide investors with trading opportunities.

Therefore we advise investors to carefully collect growth counters while exploiting the possible trading opportunities in the marketplace.

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