D Market remains sluggish

uring the week the All Share Price Index (ASPI) declined by 149.21 points to close at 5,407.11 points, while the Milanka Price Index (MPI) declined 189.11 points to close at 4,955.21 points. The daily average turnover was Rs.1.4bn compared to Rs.360mn reported during the previous week, and the week ended with foreign buying amounting to Rs.2.5bn whilst foreign selling was Rs.3.6bn.

On Monday the total turnover reached Rs.3.8bn following the large share transactions in Browns Investment (BIL) and Environmental Resources (GREG). As per the MOU signed between Taprobane Holdings PLC (TAP) and Lionhart Investments Ltd, 101mn shares of GREG were bought by TAP from Lionhart at Rs.16.70, while 353mn shares of BIL were sold by TAP to GREG at Rs.5.50. These two transactions alone generated Rs.3.63bn in turnover that accounted to 93.8% of the day’s total turnover. However both BIL and GREG closed down 20 cents (5%) and 40 cents (2%) at Rs.4.00 and 16.20 respectively. Market closed on a negative note with ASPI and MPI losing 52.39 points and 57.77 points.

On Tuesday the market further declined with ASPI and MPI losing 69.98 points and MPI 89.97 points. Turnover was Rs.272 mn while the day’s single largest turnover was a mere Rs.22.5mn that was posted from Colombo Dockyard. Index heavy Dialog Axiata having closed down 40 cents (4.8%) had the biggest negative impact on indices, while JKH losing Rs.2.00 (1%) to close at Rs.214.00 was another reason.

Two days of continues decline led the market to a steep decline on Wednesday; ASPI and MPI having lost 73.35 points and 79.55 points respectively. Turnover increased to Rs 1,564 mn led by foreign buying in JKH, GREG, and HNB. JKH topped the turnover with Rs.343 mn however the share closed down Rs.3.90 (2%) dragging down the indices. 70mn each of GREG warrants 0003 and 0006 traded by way of crossings at Rs.4.50 and 4.20 followed by HNB posting Rs.277mn with 1.9shares traded at Rs.145.00 by way of three crossings.

The market which dropped 3.5% within the first three days of the week bounced back on Thursday following the previous day’s foreign buying. ASPI and MPI moved up 46.05 points and 29.97 points respectively. The turnover for the day was Rs.487.8 mn to which GREG contributed the largest chunk of Rs 150mn followed by Aitken Spence contributing Rs.113 mn with the share having closed up Rs.4.00 (3.4%) at 122.00.

On Friday total turnover reached Rs.803mn following approximately 4.4mn shares of Distilleries traded at Rs.145.10 by way of crossing posting Rs. 640mn in turnover. The shares traded between Rs.145.10 and 150.00 and closed up Rs.1.80 at 147.50. HNB nonvoting that closed up Rs.2.50 at 112.50 posted the day’s second largest turnover of Rs.22mn. The market closed up marginally with ASPI and MPI gaining 0.46 points and 0.21 points respectively.

The bourse is down by 11% YTD despite the economic stimulation package for the coming year as proposed by the government budget, and positive financial results reported by most of the listed companies. The prevailing high interest rates have caused negative investment sentiments in the Sri Lankan stock market, however a careful investor would benefit at the end of this market cycle, by investing in a sound share portfolio.