Profit taking dominates share market



Profit-taking dominated equity markets last week with the All Share Price Index (ASPI) wiping off ~41 points off its 191 point gain over the previous two weeks, Acuity Stock Brokers said in their Share Market Weekly.


"The ASPI hit the key psychological mark of 6,500 for the first in two months last week prompting investors to take profits and helping the Index consolidate at the current levels. The benchmark ASPI consequently dropped below the key 6,500-mark on Thursday to close the week at 6,473 points." The report said.


"Market activity levels meanwhile remained broadly unchanged from the previous week, with average daily turnover at Rs. 0.83Bn last week cf. Rs. 0.92Bn a week earlier and Rs. 0.30Bn in the last two weeks of December."


Market activity levels were propped largely by strong high net worth investor and institutional participation which accounted for ~60% of total market turnover for the second consecutive week, the report said. Investor interest in blue-chips continued to dominate crossings, with JKH accounting for 30% of total crossings while COMB accounted for 28% of total crossings for the week.


Foreign inflows to the Colombo Bourse meanwhile slowed somewhat last week, declining ~82% from the previous week’s notable net inflow of Rs.2.0Bn. Nevertheless, the steady foreign interest in domestic stocks has helped the net inflows in just the first two weeks of 2018 hit ~13% of the 2017 total of Rs. 17.7Bn., Acuity said.


The net inflows of Rs. 2.3Bn in Jan’18 contrast sharply to the net outflows to Rs. 1.6Bn recorded in Jan’17, the report noted. Average net monthly foreign inflows to the CSE in 2017 was Rs. 1.5Bn, up from the average net monthly foreign inflow to Rs. 0.03Bn in 2016, and indicating the stronger interest in domestic equities on the back of the global rally in Emerging Markets/Frontier Markets risky assets.


Markets in the trading week ahead are likely to consolidate at the current levels, although some further profit taking is also likely, the report projected.


 


 
 
 
 
 
 
 
 
 
 
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