The buying impetus observed last week despite market having gained heavily, the investors looked still extremely buoyant about the Colombo Stock Exchange throughout the week. On Monday, although the turnover level was a modest Rs. 190 million, the positive outlook prevailed on the day almost assured another intense week of trading. The market saw many investors entering the market even at higher price levels, though some had their doubts about a profit taking situation in the Colombo Bourse to re-enter the market at lower and surely highly attractive price ranges. Tuesday saw the investors, particularly the locals went on buying spree predominantly on the hotel stocks which in no time shot up significantly offering opportunities especially the speculators to earn stellar returns in a rather stable but uncertain political environment. The locals were the net buyers on both days and largely drove the market to substantial levels of turnover on Tuesday as well as Thursday recording Rs. 694 million and Rs. 861 million respectively.

As the obvious case in many hectic trading days, the ASPI and MPI marched upward markedly on both days. The hotel sector gained remarkably till Thursday to see the hotel sector index shooting to 703.4 from 605.2 (up 16% WoW) when the market opened on Monday. Until such time even the most dominant sector in the Colombo Stock Market was left almost neglected by the investor community as they were completely fascinated by the boom of hotel sector stocks.

However the boom in the hotel sector stocks was too good to be true to hold on to the similar degree of surge in the prices of those shares during a short period of three days. From the point of view of the hospitality industry in Sri Lanka, the tourist arrivals for the first seven months itself has topped 260,000 tourists giving expectations of reaching 500,000 tourists for the year 2003. In essence, this huge demand for the hotel accommodation in the country should definitely help the hotel companies to recover successfully from its loss making position and post healthy profits.

Nevertheless it is imperative for the investors to bear in mind that the rises in the hotel stocks are more or less based on speculation and the sector is hy per-sensitive to the development in the political environment. The prices of the hotel sector stocks on Friday slipped as the bullish sentiment on the sector could not sustained for an extended period of time, while the market ended the week on an extremely positive note with ASPI and MPI closing at 1142.3 and 2197.3 respectively.

The NDB share which was stagnant for some time saw sudden buying interest to end the price at Rs. 158 from Rs. 153 at the start of the week. The heavily traded stocks during the week consists of 6.70 Mn shares of AHOT @Rs. 19.5-23.75, 6.06 Mn shares of SLT @Rs. 15.50-16.25, 5.53 Mn shares on Marawila Hotels @RS 4.50-7.50, 5.12Mn shares of Taj @13.25 to 17.25, 4.63 Mn shares of NDB @RS. 152-163 and 2.58 Mn shares of MBSL @RS. 6.50-8.50. During the week the ASPI and MPI appreciated by 25.7 points and 37.4 points respectively to close a 1142.3 and 2197.3.

The average daily turnover for the week was once again an encouraging Rs. 533 Mn, recording a total week’s turnover of Rs. 2.13 billion. During the latter part of the week, the interest was built up especially on the fundamentally strong stocks that have not moved up in a similar fashion with the market. The next week should be a period of testing by the investors to see where the market is heading towards in the near term and the sentiment is such that the stock market can be further strengthened.