Market rides high on SLT
market ended broadly higher for the week witnessing the largest ever
transaction in the history of the Colombo Bourse.
The boost came on Tuesday with the market indices rising drastically
in response to the sharp price gain on the telecom stock SLT following
the strategic deal that triggered a mandatory offer.
Overall the indices closed significantly high with the ASPI (All
Share Price Index) advancing by 60.1 points or 2.34% at 2625 points
while the more liquid MPI (Milanka Price Index) rose much greater by
3.06% or 98 points to 3300.7 points at week's close.
Topping market turnover with a mega deal, SLT posted a massive Rs.33
billion turnover for the week- biggest ever recorded in the bourse's
history. On Tuesday, Japan's NTT sold its 35.2% stake on SLT to Global
Telecommunications Holdings for a value of Rs.32 billion, executing 635
million shares at a price of Rs.50.50 per share.
Excluding the 635 million share transaction the counter traded
another 27 million shares during the week.
The share price, which had risen sharply since the news of a
mandatory offer, settled at Rs.48.25 at week's close gaining 15.6%.
Apart from the quantities traded on SLT, a considerable volume of
shares was seen trading on Asiri Surgical on Wednesday. Three blocks of
shares adding up to a total of 30 million shares traded at a price of
Rs.9 per share.
Thus the total contribution by the counter amounted to Rs.273 million
placing it as the second largest contributor.
Meanwhile the Asiri Surgical share appreciated 6.7% WoW to close
Rs.0.50 higher at Rs.8 per share.
Continuing to remain in the top the blue chip JKH generated a
contribution of Rs.204.6 million with a volume of 1.7 million for the
week. Counter, which traded between a price band of Rs.119.25 and
Rs.122, closed flat from last week.
DFCC during the week added Rs.148.6 million towards the total weekly
turnover with a volume of over 1.2 million shares traded for the week.
The counter before closing 1.6% up at Rs.127 per share fluctuated within
a price range of Rs.124 and Rs.127 per share.
Excluding the Rs.32 billion made on SLT trade the market activity for
the week stood at Rs.3.16 billion, up 28% compared to Rs.2.47 million
last week. The average daily turnover value meanwhile was at Rs.632.4
Both foreign purchases and sales were heavily boosted this week
attributable to the SLT deal. Removing the big trade from the foreign
activity levels, purchases for the week amounted Rs.1.2 billion, up 7.3%
and sales totaled Rs.581 million down 35.3% resulting in a net inflow of
The total foreign participation (excluding the SLT trade) stood at
28% of the total activity this week
Meanwhile the heavily traded stocks during the week were SLT, Asiri
Surgical, Vallibel and Mullers.
Point of view
Activity levels to ease off
Much expected SLT deal took place during the week becoming the single
biggest transaction in Sri Lanka's equity market history. Investor
sentiment improved with this trade as the trade went at a price, which
was higher than what the market expected. Overall the market gained by
2.34% compared to last week's closing level.
With the Sinhala and Hindu New Year expected to take the center stage
next week, investors are likely to be in a holiday mood.
Thus we believe that the overall activity levels would show a decline
in the coming week.
However we do not rule out the possibilities of bargain hunting
opportunities, thus we advise investors to keep a close eye to
capitalise on the same.