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Asian Tribune is published by E-LANKA MEDIA(PVT)Ltd. Vol. 20 No. 108

Share market up on thin volumes

By Quintus Perera – Asian Tribune

The weekly review of the HNB Stockbrokers indicated that the Colombo bourse gained momentum during the week with the indices gaining ground and continuing to hold the pace throughout the week. However profit taking dragged indices down marginally on Friday. The All Share Price Index (ASPI) increased by 30 points to 2586.6 points representing an increase of 1.17 percent while the more liquid Milanka Price Index (MPI) ended 46.4points or 1.34 percent higher at 3506.2 points.

HNB generated the highest turnover for the week representing 37 percent of weekly turnover. A sizeable share block of 4.4 million got traded on Wednesday at a price of Rs.93 with a value of approximately 409.2 million. This single trade alone contributed to 98 percent of HNB turnover of Rs.415.6 million for the week. Counter witnessed a slight 0.24 percent appreciation in its share price to close the week at Rs.101.5 per share.

Speculative trading was seen on the forestry counter Touchwood, which managed to become the second largest contributor towards the week by adding Rs.56.2 million of turnover. The share price having been traded within a price range of Rs.78.5 & Rs.89.7 per share gained 3.01 percent during the week to close at Rs.85.5 per share.

Distilleries too managed to grab investor attention this week trading almost 0.5 million of its shares, with share prices in the range of Rs.107 & Rs.109.25 thus making a total contribution of Rs.53.5 million. The stock gained 0.94 percent this week to close at Rs.107 per share.

John Keells Hotels PLC’s (KHL) voluntary offer to acquire 100 percent shareholding of the three Confifi Group hotels lead the prices of Riverina Hotels & Confifi Hotel Holding each to depreciate by 10.2 percent & 11.6 percent respectively and Eden Hotel Lanka remained flat over the week while KHL itself closed up 12.5 percent at Rs.9 per share. KHL generated Rs.45.5 million of turnover during the week thus becoming a leading contributor to this week’s market turnover.

The announcement resulted in an increased activity in hotel sector counters on Friday. During the week market turnover amounted to only Rs.1.13 billion which is a sizeable 70.5 percent decline from previous week’s Rs.3.82 billion. Wednesday’s turnover, mainly attributed by the big transaction on HNB accounted for 51 percent of week’s total turnover.

Meanwhile the daily average turnover stood at Rs.225.5 million down by 76.4 percent from last week. Foreign purchases surpassed foreign sales this week making overseas investors net buyers with Rs.76.9 million of net inflows. Both foreign purchases & sales were substantially down from last week to stand at Rs.184.3 million & Rs.107.4 million respectively reflecting reductions of 90.6 percent and 95.9 respectively. Of all activity foreign participation amounted to 13 percent.

Heavily traded stocks for the week were Keells Hotels, HNB, Tess Agro & Malwatte. Meanwhile expressing their point of view HNB Stockbrokers indicated that the weak macro fundamentals would hurt the market. Market gained on relatively thin volumes during the week with low retail activity continuing for yet another week. The All Share Price index (ASPI) gained by 30 points during the week while the sensitive Milanka Price Index (MPI) gained 46.4 points compared to last Friday’s closing level.

Activity levels to remain low

During the next week they expect the market to find resistance near 2600 level. With interest rates and inflation still persisting at high levels, they do not anticipate the market activity to improve significantly during the coming week. In the absence of any positive developments the HNB Stockbrokers expect the ASPI to hover around 2600 and activity levels to remain moderate during next week.

- Asian Tribune -

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