Market finds support
During the week the All Share Price Index (ASPI) declined by 6.23 points to close at 5,516.49 points, while the Milanka Price Index (MPI) declined 0.62points to close at 5,044.58points. The daily average turnover was Rs.1,071mn compared to Rs.547mn reported during the previous week, and the week ended with foreign buying amounting to Rs.2,238mn whilst foreign selling was Rs.1,048mn.
On Monday the market closed on a negative note with ASPI and MPI losing 19.21 points and 33.30 points respectively. Total turnover for the day amounted to Rs.533mn to which the single largest contribution of Rs.203mn came from Environmental Resources (GREG). Approximately 13.5mn shares trad- ed at Rs.15.00 by way of a crossing that is believed to be bought by Caledonian Securities. Chevron Lubricants which closed up Rs.2.40 posted the day’s second largest turnover of Rs.109mn which included a crossing done at Rs.200.00.
On Tuesday the total turnover reached Rs.2.6bn following Asiri Surgical Hospital (AMSL) selling its 32.7% stake in Asiri Central Hospital (ASHA) at Rs.250 per share to Asiri Hospital Holdings (ASIR) for a total consideration of Rs. 1.83bn as part of the ongoing restructuring in the Asiri Group. 1.8mn shares of Commercial Bank traded between Rs.102.00 and 104.00 of which a majority of 1.2mn was traded at Rs.103.00 by way of crossings. Sampath Bank also made an equal- ly important contribution in terms of turnover having posted Rs.170mn. This was followed by JKHwhich closed down Rs.1.20 at 217.80 and Dialog Axiata which closed flat at Rs.8.00 with more than 16.6mn shares traded. ASPI and MPI reported marginal gains of 1.19 points and 27.40 points respectively.
Approximately 1.9mn shares of Commercial Bank changed hands on Wednesday of which 1mn shares traded at Rs.103.00, and another 692,300 shares at Rs.102.00 by way of crossings. Cargills which closed flat at Rs.154.00 posted the day’s second largest turnover followed by Bukit Darah with Rs.52mn. Market closed on a mixed note with ASPI having gained 4.96 points and MPI having dipped 18.44 points.
On Thursday JKH posted the day’s single largest turnover of Rs.572mn with approximately 2.6mn shares traded of which nearly 1.7mn shares traded at Rs.218.00 by way of crossings. Aitken Spence posted the second largest turnover for the day which amounted to Rs.67mn while the share closed up at Rs.117.60. ASPI and MPI closed up marginally higher gaining 14.70 points and 9.76 points respectively.
On Friday total turnover reached Rs.959mn to which the largest contribution of Rs.364mn was made by Asiri Surgical which closed flat at Rs.9.40 with 38.4mn shares traded of which 31.8mn shares traded at Rs.9.50 by way of crossings. An equally important contribution was made by JKH with 1.4mn shares traded at Rs.218.00 through several crossings. Market closed on a mixed note with ASPI having lost 10.87 points and ASPI having gained 13.96 points.
The 25 basis points policy rate cut which happened on 12th December 2012 signifies a downward trend in the interest rates in the coming months that will have a positive impact on the Colombo bourse. Over the last two Treasury Bills (TB) auctions the average TB Rate have also come down 60 basis points. Further decline in interest rates will attract local retail investors back to the equity market as fixed income alternatives will start generating lower yields. The Colombo bourse which was down by more than 11% a fortnight ago has started to regain its strength following the recent rate cut. Technically the second shoulder of an inverted Head & Shoulder formation is getting formed. The breaking out of the two indices through the neckline of this formation will be a big bullish signal.