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Asian Tribune is published by E-LANKA MEDIA(PVT)Ltd. Vol. 20 No. 105

Last minute recovery amid renewed interest

By Quintus Perera – Asian Tribune

The HNB Stockbrokers in their weekly review indicates that the market opened lower and continued to be so during most part of the week except on Wednesday and Friday where the market witnessed a marginal increase of 3.72 points on Wednesday and a substantial rise of 23.1 points on Friday which drove up the market index to close marginally below last week’s 2586.6 points. The All Share Price index (ASPI) slid a mere 1 point or 0.04 percent to 2585.6 points while the Milanka Price Index (MPI) edged up 0.37 percent or 12.9 points to end at 3519.1 points.

People’s Merchant (PMB) topped this week with over Rs.357 million turnover constituting 26.18 percent of week’s total turnover. The stock traded within a wide price range of Rs.26 & 40.5 per share gaining a massive 46.3 percent price appreciation for the week. The interest on PMB counter was predominantly due to DPMC Financial Services (Pvt) Ltd selling their 29.27 percent stake in the Company to 3 parties namely Galleon International Master fund SPC Ltd (11 percent), Lionhart Investments Limited (10 percent) and Lanka Orix Leasing Company Ltd (7.8 percent)

With Touchwood Limited (Hong Kong) selling 29.18 percent stake it held in the forestry firm Touchwood Investments Limited to Lanka Orix Leasing Company, approximately 3.5 million shares of the Company changed hands during the week adding a turnover of Rs.295.21 million to the total market turnover. The share price closed Rs.6.25 higher at Rs.91.75 after peaking at Rs.94.

Premier blue chip counter JKH, with 1,770,250 shares traded at a price range of Rs.127-130 contributed Rs.228.7 million to the weekly turnover. Out of the JKH’s weekly turnover 72 percent was witnessed during Friday’s trading alone.

Renewed interest was shown on Nestle with 191,200 of its shares trading for the week. The share price witnessed a WoW increase of 0.19 percent to close at Rs.261 per share. The counter was among the leading contributors towards the weekly turnover with over Rs.49 million of turnover.

The big trades on blue chip counters Dialog & JKH, which took place during the last trading hours of the week pumped the weekly turnover where Friday’s turnover alone contributed Rs.702.8 million or 51.5 percent to the total market turnover. The week as a whole made Rs.1.36 billion worth of turnover, up by 21.1 percent from previous week. Meanwhile the daily average turnover stood at Rs.273 million

The week felt increased foreign activity with foreign participation amounting to 37 percent of total activity compared to last week’s 13 percent. Foreign purchases & sales showed a notable increase of 201.5 percent and 328.7 percent to stand at Rs.555.7 million and Rs.460.4 million respectively. This resulted in net foreign inflows of Rs.95.3 million, up 23.9 percent making overseas investors net buyers for the week.

Most traded stocks during the week were People’s Merchant, Touchwood, Ceylon Glass & JKH.

Meanwhile HNB Stockbrokers in their point of view advised to stock to fundaments and indicated that as expected by us, the market remained weak as investors continued to adopt a cautious approach. Overall the market remained almost flat losing 1 point compared to last week despite a late recovery on Friday.

They expect the sentiment to remain dull during the coming week with the market expected to find resistance at 2600 levels until some positive news emerges that would boost investor confidence. Furthermore the HNB Stockbrokers advice investors to focus more on fundamentally sound counters due to the low short term trading opportunities and increased uncertainties.

Rs.30 wage hike to put pressure on bottom lines of plantations

This week the daily wages of plantation workers were increased by Rs.30, to amount to Rs.200. This wage hike followed the last years 33 percent wage increase granted with the expiration of previous collective agreement. In their opinion this wage increase would put further pressure on the margins of plantation companies. However on a positive note, the tea prices averaged significantly (32 percent) higher this year compared to last year cushioning the position of Regional Plantation Companies (RPCs).

Furthermore the rupee has depreciated more than 5 percent this year benefiting plantation companies due to their exporter status.

- Asian Tribune -

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