Indices to remain volatile next week

STOCK MARKET: After a brief stint of positive momentum the indices once again slipped into negative territory with Friday alone All Share Price Index (ASPI) and Milanka Price Index (MPI) dropping by 23 points and 34 points respectively.

Overall during this week the ASPI shed 14 points to close at 2589 points while the more sensitive MPI dropped by 23 points to close at 3625 points.

The conglomerate giant JKH, continued to dominate the market with strong foreign interest on the Counter.

On Thursday alone 2.7 million JKH shares were traded with approximately Rs.450 million foreign investments flowing into the Counter at a price of Rs.148.

During the week the Counter traded within a range of Rs.150 and Rs.146.50 while closing at Rs.147.25, flat from last week. The Counter contributed Rs.535 million towards this week’s market turnover.

ACL managed to attract significant investor interest this week after announcing their intention to split the share. The proposed split will increase the issued share capital from 29,946,840 shares to 59,893,680 shares.

What is interesting to note is that the share price of ACL appreciated after the announcement, gaining 5.4% to close the week at Rs.136.00.

The Counter during the week traded within a wide range of Rs.139 and Rs.130 while contributing Rs.45.9 million towards weekly turnover.

Ceylinco Insurance, which has time to time attracted notable retail interest managed to contribute Rs.43 million towards this week’s market turnover. The Counter during the week traded between Rs.184.50 and Rs.175 while closing at Rs180 reflecting a 2.8% growth week on week.

SLT continued to remain among investor appetite with 973,100 of its shares being traded during the week. The counter contributed Rs.36 million towards weekly turnover while trading within a narrow range of Rs.37.50 and Rs37. The Counter failed to hold its ground this week slipping by 0.67% to close at Rs.37.

Total market turnover for the week stood at Rs.946 million with a notable reduction in retail participation witnessed during the week. The average daily turnover for the week stood at Rs.189 million down by 62.5% compared to Rs.505.3 million recorded last week.

Foreign investors continued to remain net buyers with a significant 272% increase in net foreign inflows to amount to Rs.555.5 million during this week. Majority of foreign investments during the week were targeted at JKH.

Foreign purchases this week amounted to Rs.644 million reflecting a 64% drop while foreign sales dropped by 95% to stand at Rs.88.8 million. Foreign participation for the week stood at 39% of total activity.

Tess Agro, JKH, Ceylon Glass, Seylan Bank (NV) and SLT were among the highest traded stocks for the week.

After gaining for 2 consecutive weeks, market turned south this week on thin volumes. However the foreigners continued to remain as net buyers in the market place with interest mainly shown on JKH.

Overall the All Share Price Index (ASPI) lost 14.1 points during the week while more sensitive Milanka Price Index (MPI) shed 23.4 points compared to last week’s closing levels.

We expect the indices to remain volatile within a narrow range during the coming week. Thus we do not expect a significant shift in the sentiment and the activity levels in the market though the market is currently trading at attractive levels.

However the anticipated volatility may provide investors with trading opportunities during next week.

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