|DFCC Stock Brokers (Pvt) Ltd.
Market & Business Highlights
Market overview: Indices pick on better activity levels. Some positive activity through the week saw both indices register gains. The ASI closed at 613.5 up 0.57% while the MPI closed at 1019.0 up 1.39% Turnover for the week came in at SLRs318.3Mn up 273% from last week. Foreigners were net buyer this week with net foreign inflow amounting to SLRs 66.4Mn
The week started on a positive note with foreign interest on certain blue chips driving both the indices and turnover levels. However towards the end of the week activity eased up once again, which we believe could be attributed to the holiday shortened week.
Overall we believe that with the government outlining its policies and proposals in the budget, and as we expect these would filter through to stabilize key macro variable in the longer term, this would spell out more steady upward movement in the market, as current fundamentals cannot support a sudden upward surge Most of this upward movement we expect would come in towards the 2H02.
The government has also indicated its aim to raise SL Rs 20 Bn through Divesture. This should prove positive in boosting the liquidity in the equity market. Improving liquidity would be key in attracting large funds to the market. Most of these privatizations were on hold last year. However we have already seen the urgency in which the government wishes to get this program off the ground, with the divestment of government stake in Talwakelle, Malwatte Valle and Pelwatte Sugar, while SLT and even the possibility of privatising CPC on the cards this year.
Given that the year ahead should show some recovery as we are coming off the negative base of last year, we certainly do believe that certain stocks will provide investors with excellent growth potential and investor value. As such investors should accumulate at current levels.
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