Weekly market review:

Blue-chip stocks dominate

Colombo bourse during the week moved into the negative territory with activity being largely held by selected blue chip stocks. Though the market turnover improved during the week backed by several large deals, investors continued to wait for positive developments in the marketplace.

Overall the two indices ended down with benchmark ASPI (All Share Price Index) shedding 46.1 points or 1.6 percent to 2933.3 points whilst the more liquid MPI (Milanka Price Index) closing down 62.4 points or 1.8 percent to 3333.6 points.

Blue-chip stocks were in demand this week as activity levels were dominated largely by counters such as Commercial Bank, HNB, Hemas and Dockyard. Banking sector counter Commercial Bank (COMB) took the forefront in turnover, contributing Rs.1.3 billion or 35.0 percent of the market turnover.

The major part of Rs.620.3 million came on Tuesday amid heavy foreign selling witnessed on the counter. Nearly 3.5 million shares in large parcels traded hands on Tuesday at a price of Rs 177 per share while for the week a total of 7.4 million of COMB shares traded within Rs 175 and Rs 180 per share. Week-on-week the share price dipped 1.3 percent to close at Rs 175.75 per share on Friday.

HNB yet another banking counter which saw interest this week, with both its Voting and Non-Voting shares, being placed amongst the top five contributors of the week. HNB Voting became the top contributor to daily turnover on three of the five trading days while COMB managed to post highest daily turnover on the remaining two days.

HNB Voting saw its share price rising by 1.4 percent week-on-week to Rs.168.50 per share while contribution towards the weekly turnover by the counter amounted to Rs.863.2 million. Meanwhile HNB Non Voting contributed Rs.99.7 million towards weekly turnover with 1.1 million shares trading for the week. The HNB Non Voting share price declined by 1.1 percent compared to last week, to close at Rs 89 per share.

Weekly activity levels improved by 26.2 percent compared to last week, to total Rs.3.7 billion, with COMB and HNB contributing the major part of Rs.2.2 billion. Meanwhile the average daily turnover for the week amounted to Rs.736.7 million.

Foreign participation stood at a high of 44.9 percent of total activity for the week with major foreign contribution coming through COMB trades which constituted of foreign selling. Thus foreign investors this week became net sellers, reversing its net position as net buyers posted last week, with a total net outflow amounting to Rs.820.9 million for the week. Foreign purchases were up by 179.2 percent to stand at Rs.1.2 billion, while foreign sales saw a larger increase of 390 percent to stand at Rs.2.1 billion for the week.

The highest traded stocks during the week were Vallibel, Commercial Bank, HNB, Nawaloka and Dialog.

The week ended on November 20 saw the ASPI moving from 2979.4 points to 2933.4 points amounting to a decline of 46.1 points. The MPI moved down 62.4 points.

The week saw the monetary authorities slashing down the policy rates for the sixth time during year 2009. The Repo is down 50 basis points to 7.50 percent and the Reverse Repo is down 75 basis points to 9.75 percent. Clearly shows continuous commitment and positive thinking by the authorities, to induce the private sector for investments.

There was the show of interest by many international funds on the country. Many of these funds would be coming through as either private equity or listed funds. The Leopard Sri Lankan fund, as mentioned at the launch over the weekend envisions bringing in USD 100 million into the private equity markets. The sectors shown interests are export oriented business, power projects and tourism etc.

Subsequent to the initial period of management, the value locked in these companies would be unleashed through the stock exchange. This would make the bourse more vibrant and liquid to investors.

The information contained herein has been compiled from sources that Acuity Stockbrokers (Private) Limited (ASB) believes to be true and reliable but we do not hold ourselves responsible for its completeness or accuracy. No matter published herein create any liability of any kind on ASB.

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