Market starts much anticipated rally

During the week, the All Share Price Index (ASPI) increased by 109.34 points to close at 6,083.14 while the S&P SL20 increased by 89.69 points to close at 3,384.51. The daily average turnover was recorded at Rs.997mn compared to Rs.320mn reported during the previous week. Foreign buying for the week was Rs.2.16bn, and foreign selling was Rs.1.72bn.

On Monday total turnover was Rs.462mn. JKH contributed Rs.96mn being the single largest turnover for the day with foreign purchases of 129,379 shares; closed down by Rs.1.40 at Rs.227.50. Approximately 660,000 shares of Commercial bank (COMB) traded during the day with some foreign buying, and share closed up 80 cents at Rs.120.90. ASPI and S&PSL20 declined 28.81 points and 13.58 points as investors booked early profits.

The total turnover on Tuesday reached Rs.716mn. Hatton National Bank (HNB) was the top contributor in terms of turnover; 1.5mn shares changed hands of which approximately 521,000 shares were bought by foreign investors for Rs.229mn and the share closed up Rs.1.80 at Rs.149.80. JKH closed up by 30 cents at Rs.227.80 with 484,766 shares traded, which included some foreign buying. The market renounced with both ASPI & S&P SL20 increasing by 32.08 points and 19.21 points respectively.

On Wednesday total turnover was Rs.850mn to which the largest contribution of Rs.172mn was made by JKH with 745,147 shares traded. This included foreign buying of approximately 478,000 shares, while the share closed up by Rs.7.20 at Rs.235.00. COMB, which was the second largest in terms of turnover closed up Rs.1.70 at Rs.124.60 with 833,831 shares traded, which included foreign purchases of 167,313 shares. The market was on an upbeat with ASPI substantially increasing by 77.40 points and S&PSL20 by 49.86 points.

Thursday’s total turnover reached Rs.1.57bn. Chevron (LLUB) posted the highest turnover of Rs.395mn for the day with 1.4mn shares traded, and the share closed down by 90 cents at Rs.273.50. JKH also made a significant contribution to turnover with 1.3mn shares traded with foreign purchases of 247,929 shares; closed down by Rs.2.50 at Rs.232.50. The market ended on a posi- tive note with both ASPI and S&PSL20 up by 14.87 points and 13.71 points respectively.

On Friday, total turnover was Rs.1.38bn. LLUB posted the highest turnover of Rs.495mn, with 1.8mn shares traded, while the share closed at Rs.274.50; up by Rs.1.00. 525,480 shares of JKH traded during the day with foreign sales of 483,850 shares; share closed down by 70 cents at Rs.231.80. The market closed on a positive note; both ASPI and S&P SL20 up by 13.80 points and 22.12 points respectively.

The consistent drop in Treasury bill rates (12 month rate reduced 53 basis points to 7.42% in this week’s auction), as well as the consistent drop in the fixed deposit rate of finance companies (12 month interest rate dropping from 16.6% to 12.6% in the last 12 months), will divert funds from fixed income instruments to the stock market.