Plantation earnings would continue to be strong

For the week, market ended high continuing its positive trend for the continuous eighth week in a row. Speculative trading on few selective stocks mainly drove the market indices up this week.

The ASPI (All Share Price Index) moved 34.9 points higher, or 1.38% to 2565.8 points while the liquid MPI (Milanka Price Index) edged up 43.1 points or 1.36% to 3215.3 points to close the week on a positive note.

The telecom counter SLT, subjected to speculation, witnessed 6.45 million shares changing hands accounting for the largest turnover by a single stock of Rs. 232.8 million for the week.

During the week SLT share price was up by Rs. 2 to Rs. 36.50 per share, showing a WoW price appreciation of 5.8%. SLT, which also became the third largest in terms of volume traded for the week, fluctuated within a price band of Rs.34.25 & Rs.37.25 per share.

Interest on the blue chip JKH remained, with approximately 1.1 million of its shares trading this week, contributing approximately Rs. 132.54 million towards the week’s turnover.

The counter WoW showed a slight gain in price of 0.63% compared to last week, to close at Rs. 120.25 per share this week.

The majority of JKH turnover was seen materialising on Tuesday.

Investor interest was also seen in York Arcade, which during the week traded a total volume of 4.9 million shares to generate a turnover of Rs. 79.54 million. The counter before closing at Rs.16 per share traded at a high of Rs. 17.50 and a low of Rs. 13.25 per share observing an impressive 10.3% increase in the share price.

Revived interest on Touchwood made the stock to become one of the top contributors over the week. 0.7 million of Touchwood shares were traded during the week adding up a total value of Rs. 74.2 million to the weekly turnover. The counter meanwhile witnessed its share price surge by Rs. 10.5 or 11.5% to Rs. 101.75 per share, at week’s close.

Market activity this week amounted to Rs. 1.4 billion, declining 55.9% against last week’s level. Being a four-day trading week the average daily turnover for the week stood at Rs. 357.2 million.

Foreign investors remained net buyers for the week amounting to Rs.150 million. Foreign purchases for the week stood at Rs. 438.1 million, while foreign sales totaled to Rs. 288.1 million. The foreign participation for the week was at a low of 25.4% of total activity, compared to a participation level of 37% posted last week.

Indices to inch forward

Seylan Merchant, Sierra Cables, SLT and York Arcade were the most heavily traded stocks for the week. Market continued to maintain its positive momentum on healthy volumes with stocks such as SLT, LCEM gaining investor attraction. Both foreign as well as domestic retail investors were seen active during the week.

Overall the All Share Price Index (ASPI) gained 36.9 points during the week while the sensitive Milanka Price Index (MPI) notched up 45.7 points compared to last week’s closing level.

We do not expect a major shift in the existing trend in the market place, thus the positive sentiment is likely to continue with noteworthy activity levels.

Furthermore the investor interest on the plantation counters subsided on the back of profit taking, however we believe that the plantation earnings would continue to be strong during the first quarter of this calendar year as a result of high tea and rubber prices.

Therefore we advise investors to accumulate plantation counters if the prices fall back to attractive levels.

“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. All opinions views findings and conclusions included in this report constitute our judgment of this date and are subject to change without notice.