Investors mainly looking at trading opportunities:
Market volatile with healthy performance in exports
MARKET remained highly volatile throughout the week sliding
substantially on Friday with ASPI falling by 16 points, nevertheless
managed to close 6.2 points higher for the week.
The ASPI (All Share Price Index) gained 6.2 points or 0.24 per cent
at 2625.7 points while the more sensitive MPI (Milanka Price Index) slid
8.9 points or 0.25 per cent to close the week at 3506.7 points on WoW.
Conglomerate JKH generated 14.3 per cent of weekly turnover becoming
the key contributor for the week. The stock traded almost 1.6 million
shares to generate a turnover of Rs. 213 million. At Friday’s close, the
JKH share was up 1.54 per cent WoW to Rs. 132.
Renewed interest was seen in C.W. Mackey & Company which saw an
impressive 50 per cent price appreciation, which was also the highest
traded stock for the week, with 5.3 million shares changing hands. C.W
Mackey share managed to generate a total turnover of Rs. 202 million.
The stock traded between a wide price band of Rs. 26 & Rs. 45 while
closing the week at Rs. 39.
The talk on takeover, lead hotel sector counter Riverina to do Rs. 89
million worth of turnover for the week reflecting approximately 6 per
cent of total market turnover. The counter saw over 1.8 million of its
shares traded with share price in the range of Rs. 36 and Rs. 54.25 up
by a significant 39 per cent to close at Rs. 50 per share.
Revived interest on Bairaha Farms saw its price jumping up by 25 per
cent to close at Rs. 15 per share for the week. Over 5 million shares of
the counter were traded adding over Rs. 75 million to week’s turnover.
During the week’s trading counter touched a peak of 16.5 per share and a
low of Rs. 11 per share.
Total market turnover for the week amounted to Rs. 1.5 billion with
an average daily turnover of Rs. 298 million. Turnover saw a notable
33.8 per cent drop compared to last week’s market turnover of Rs. 2.25
billion.
Foreign participation remained low at 15.4 per cent for this week
compared to 50.4 per cent posted last week. Both foreign purchases and
sales dipped on a WoW basis.
Foreign purchases for the week amounted to Rs. 283.6 million
declining by 81.3 per cent, while foreign sales dropped 77 per cent to
stand at Rs. 174.5 million resulting in a net inflow of Rs. 109.1
million for the week. Thus overseas investors continued to be net buyers
for yet another week. The most traded stocks for the week were C.W.
Mackie & Company, Vallibel, Bairaha Farms & Ceylon glass.
Market to remain volatile
Indices experienced volatility as retail investors were mainly
looking at trading opportunities. All Share Price Index (ASPI) gained
marginally by 6.2 points during this week’s trading, while the more
sensitive Milanka Price Index (MPI) fell by 8.9 points.
We expect the indices to remain volatile within a narrow range
providing investors with trading opportunities in the market place.
Furthermore corporate earnings released so far by the listed companies
have shown mixed results with banking sector companies continuing with
strong performance.
Thus we advice investors to focus on trading opportunities in the
market place while collecting stocks that look undervalued at current
price levels.
Despite trade deficit widened by a sharp 42.6 per cent in September
the cumulative deficit (January 2007 to September 2007) continued to
remain down by 7.5 per cent compared to the corresponding period last
year.
Healthy performance in exports continued with September growth
standing at 19.2 per cent YoY to US$724.6 million. The growth in
September exports was primarily due to the strong performance shown in
agricultural exports amid higher prices and volumes of tea exports.
Meanwhile imports increased by a high 24.9 per cent YoY to US$ 1.06
billion during September 2007 backed by higher imports of intermediate
and investment goods. Import of intermediate goods increased by 36.7 per
cent during the period under review mainly due to a 102 per cent
increase in petroleum imports to US$ 268.1 million.
Meanwhile, cumulative exports (Jan to Sep 2007) increased by 12.6 per
cent YoY to US$ 5.65 billion while cumulative imports increased by 5.7
per cent to US$ 8.05 billion resulting in a noteworthy drop in trade
deficit by 7.5 per cent to US$ 2.4 billion compared to US$ 2.6 billion
in the corresponding period last year.
The Balance of Payments (BOP) and Gross Official Reserves by the end
of September 2007 stood at US$ 70 million and US$2.6 billion
respectively. We expect a sharp increase in the BOP in October with
US$500 million inflow from the government’s sovereign bond issue being
reflected in the capital account.
“HNB Stockbrokers (Private) Limited has the sole copyright for this
report and the information and views contained cannot be reproduced or
quoted in part or whole in any form whatsoever without the written
permission from HNB Stockbrokers (Private) Limited.
Category September September Growth Jan-Sep Jan-Sep Growth
2006 2007 September 2006 2007 Jan-Sep
US$ mn US$ mn % US $ mn US$ mn %
Exports 608.0 724.6 19.2 5019.4 5651.4 12.6
o/w Agriculture 111.0 149.9 35.0 958.9 1083.9 13.0
o/w tea 73.8 103.3 39.9 653.8 727.6 11.3
Industrial 461.7 538.4 16.6 3906.9 4369.1 11.8
o/w textiles and garment272.1 291.6 7.2 2223.8 2455.9 10.4
Mineral 20.5 10.7 -47.7 108.6 102.2 -5.9
Imports 805.6 1006.4 24.9 7617.5 8054.7 5.7
o/w Consumer Goods 195.7 167.3 -14.5 1442.6 1474.4 2.2
Intermediate Goods 439.5 600.6 36.7 4465.8 4635.3 3.8
o/w petroleum 132.7 268.1 102.0 1589.7 1609.0 1.2
Investment Goods 166.4 235.1 41.3 1659.1 1864.6 12.4
Balance of Trade -197.6 -281.8 42.6 -2598.1 -2403.4 -7.5
(Source: Central Bank)
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