Speculation on SLT stimulates market activity

The market lost some ground this week ending the positive run it maintained for eight consecutive weeks. Although the ASPI closed slightly down from last week, the activity levels remained substantially high driven mainly by investor interest on SLT.

Opening flat the indices moved to make slight gains during the mid week, but failed to keep up the pace towards the last two days of the week.

Hence the ASPI (All Share Price Index) lost a mere 1.8 points or 0.07 per cent to 2,566.0 points while the more sensitive MPI (Milanka Price Index) moved in the opposite direction to close slightly higher at 3,223.9 points, rising by 6.0 points or 0.19 per cent on WoW.

Yet again SLT dominated the week’s market activity reflecting almost 46 per cent of the total weekly turnover. The stock topped the activity levels on each of the five trading days of the week thereby contributing a substantial Rs. 1.56 billion to the week’s turnover.

The SLT share price meanwhile, ended higher at Rs. 39.25 per share witnessing an impressive 7.5 per cent increase over the week.

The counter also became the highest traded stock with a total of 40.1 million shares been traded for the week.

Renewed interest was seen in the high cap Distilleries, which traded 2.3 million shares to generate a turnover of Rs. 227.8 million over the week. Distilleries share traded between a price band of Rs. 99.75 and Rs. 101 to close the week unchanged at Rs. 100 per share.

Investor interest on the blue chip counter JKH continued with the stock managing to generate a contribution of Rs. 224.5 million towards the weekly turnover. JKH traded 1.86 million shares closing flat at Rs. 120.25 WoW.

The blue chip saw its share peak at Rs. 122 during the week. Following closely was Commercial Bank, contributing approximately Rs. 220.9 million of turnover by trading a total volume of 1.5 million shares.

Although the banking counter managed to become a top contributor for the week the share price WoW dipped 2.87 per cent to close at Rs. 144 per share. The stock traded within a price band of Rs. 144 and Rs. 149 before closing Rs. 4.25 down for the week.

Turnover this week soared to great heights with SLT acting as the major catalyst to push up the turnover to pass Rs. 3 billion for the week. Thus the total market activity during the week amounted to an outstanding Rs. 3.4 billion, showing a significant 136 per cent increase from last week.

Meanwhile the average daily turnover stood at Rs. 674 million, up by 89 per cent compared with last week, which was limited to 4 trading days only. Foreign investors this week became net sellers reversing its net position as net buyers posted last week with a total net outflow of Rs. 384 million.

Foreign purchases was up by 150 per cent to stand at Rs. 1.1 billion, while foreign sales saw a much higher increase of 401 per cent to stand at Rs. 1.4 billion for the week. Foreign participation for the week improved 37.6 per cent of total activity, compared to last week’s participation level of 25.4 per cent. The most heavily traded stocks during the week were SLT, Parquet, Seylan Bank (Non Voting) and Seylan Merchant (Non Voting).

Market went south during the week and ended in the red after investors looked towards profit taking after almost 2 months of continuous gains. Sri Lanka Telecom (SLT) was the highlight during the week with investors chasing the counter after the court decision on Monday.

Overall the All Share Price Index (ASPI) lost marginally by 1.8 points during the week, however the Milanka Price Index (MPI) gained 6 points compared to last week’s closing levels. We expect the indices to fluctuate in a narrow range as a mix of profit taking and bargain hunting is likely to continue during the coming week.

Meanwhile we believe the SLT counter would continue to attract investor attention during the coming week helping the market activity levels to remain healthy.

“This information has been compiled from sources that we believe to be reliable but we do not hold ourselves responsible for its completeness or accuracy. No matter published herein create any liability of any kind of HNB Stockbrokers (Private) Limited or its associates.