Falling interest rates to entice retail investors

* Stock market review for the week ending 18thJanuary 2013:


Retail buying and foreign participation continued throughout the week with the continued drop in T-Bill yields which had started to gradually reflect on equities. This move is expected to further elevate further as the market interest rates would follow the declining trend over the short term, hence further enticing equity investors.

Trading for the week opened on Tuesday after the market holiday which fell on Monday with both indices closing marginally higher amidst gains in some large cap counters. Trading for the week opened with both indices closing marginally lower. The ASPI and the S&P SL20 closed at 5,751 and 3,134 respectively with both indices closing higher. An year to date change of 1.90 % and 1.59 % was recorded for ASPI and S&P SL20 indices. Top contributors for the turnover were Commercial Bank with Rs. 258million, JKH edging up to Rs 224.30 with a turnover of Rs. 182.64 while Sampath Bank price was recorded at Rs 205 with Rs 62.9Mn turnover. Activity levels were dominated by trades by these counters which collectively accounted for more than 70% of the total market turnover. Commercial Bank saw four crossings take place at a uniform price of Rs. 105 generating a turnover of Rs. 217.22 million. A net foreign inflow of Rs190.57Mn was recorded for the day.

On Wednesday, positive investor sentiments emerged at the Colombo Bourse and the total market capitalization expanded by Rs. 24 billion in one of the highest day-gains in recent times. The ASPI index gained 62 points to reach 5812 points while the S&PSL20 was up by 29 points to close at 3163 points. Turnover for the day was recorded at Rs 636 Mn. Investors celebrated as policy rates were brought down further as the T-bill yields eased for the seventh straight week. Top contributors for the day were JKH with Rs 165.9 Mn ,Softlogic Holdings with Rs 78.5 Mn and CeylonTobacco Company with Rs 56.9 Mn. Foreign investors were net buyers of 152.51 million rupees worth of shares, extending the net inflow to 635.1 million rupees this year.

The ASPI continued to trend sharply higher amid strong gains in most large and midcap counters on Thursday. Turnover crossed the Rs. 2bn mark, supported moderately by block trades on Distilleries, JKH, Aitkens Spence, Commercial Bank and HNB which collectively accounted for over 45% of market turnover.The benchmark index ASPI recorded a gain of 62 points to close at 5,875 while the S&P SL20 was up by 21 points to close at 3,184. A total turnover Rs. 2,049 million was recorded for the day. Top contributors to turnover for the day were Distilleries with Rs 583.6 Mn, Commercial Bank with Rs 417.4 Mn and JKH withRs 127.3Mn and the most active counters for the day were Central Investment and Finance, Softlogic Holdings and Laughs Gas (non-voting). Notable gainers for the day were Lanka Milk Foods, Lanka IOC and E.B Creasy. Foreign participation was 50% of total turnover while net foreign buying was recorded at Rs 152.5 Mn for the day.

Market opened on Friday on a positive note with investors continuing their positive momentum. Benchmark ASPI index edged up marginally by 0.5 points to close at 5876 points while the S&PSL20 closed at 3174 points. Total market turnover for the day was recorded at Rs 789Mn. Commercial Bank headed the top gainers list contributing Rs 273Mn.The other top contributors were Hayleys with Rs 72Mnan Distilleries with Rs 65Mn.

(Innovest Investments (Pvt) Ltd – an Investment Management Company, licensed by the Securities and Exchange Commission of Sri Lanka)

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