Weekly Market Focus

Gains on Nestle, Carson Cumberbatch and Bukit Darah helped to offset the negative effects of profit taking on banking and Financials on Monday’s trading. Banking & financials dominated turnover whilst retail activity was seen on planation and few other mid-capped shares such as Access Engineering. ASI gained 0.68 points (0.01%) to close at 5,851.35 and the S&P SL20 index dipped 3.01 points (0.09%) to close at 3,268.24. Turnover was Rs. 938.3Mn.
Policy rates were held steady amidst inflationary pressures which affected the indices to close lower on Tuesday. Gains on blue-chips such as John Keells Holdings, CTC and National Development Bank failed to uplift the momentum as retail selling was evident on many counters. HNB continued to witness privately negotiated deals whilst John Keells Holdings touched its 52 week high of Rs. 231.00. Meanwhile Touchwood Investments, PC House and CIC non-voting touched their 52 week lows.ASI lost 15.24 points (-0.26%) to close at 5,836.11 and the S&P SL20 index lost 10.26 points (0.31%) to close at 3,257.98. Turnover was Rs. 705.3Mn.

On Wednesday, Institutional buying on premier blue-chip John Keells Holdings failed to light up the market as profit taking and government disagreement with the IMF on further funding weighed the indices lower. Investors also failed to see the upside in equities with further reduction in Treasury bill yields in today’s auction. John Keells touched a 52 week high of Rs. 232.00 with Dialog Axiata also touching a 52 week high of Rs. 9.40. ASI dipped 9.09 points (0.16%) to close at 5,827.02 and the S&P SL20 index lost 0.84 points (0.03%) to close at 3,257.14. Turnover was Rs. 608.5Mn.

On Thursday, banking counters led in terms of turnover as the market saw a relatively dull day in terms of turnover. An interim dividend of Rs. 5.00 from NDB failed to lift the spirits of investors as stocks traded on a mixed note. We have seen Dipped Products adjust positively and Bairaha Farms and RenukaAgri Foods adjust negatively according to their reported earnings. Therefore we can expect counters to adjust according to their performance in this reporting season which will give investors plenty of opportunities.ASI dipped 1.73 points (0.03%) to close at 5,825.29 and the S&P SL20 index gained 11.80 points (0.36%) to close at 3,268.94. Turnover was Rs. 471.0Mn.

On Friday, Indices held onto positive territory helped by gains on telecommunication, palm oil and banking sector counters. Today’s turnover is one of the lowest for the year. However, stocks seem to be adjusting their prices according to their reported earnings which is encouraging as it gives investors many opportunities.

ASI gained 4.97 points (0.09%) to close at 5,830.26 and the S&P SL20 index gained 4.75 points (0.15%) to close at 3,274.25. Turnover was Rs. 351.1Mn.
Top contributors to turnover were John Keells Holdings with Rs. 60.0Mn, Bukit Darah with Rs. 37.6Mn and 37.4Mn. Most active counters for the day were Touchwood Investments, People’s Leasing & Finance and Sampath Bank.

Notable gainers for the day were Hayleys Fiber up by 9.8% to close at Rs. 33.60, People’s Leasing & Finance up by 3.7% to close at Rs. 14.00 and Renuka City Hotels up by 3.0% to close at Rs. 240.00. Notable losers for the day were Bairaha Farms down by 5.3% to close at Rs. 125.00, Swarnamahal Financial Services down by 5.1% to close at Rs. 3.70 and Asia Asset Finance down by 3.9% to close at Rs. 2.50.Cash map for today was 45.11%. Foreign participation was 20.74% of total market turnover whilst net foreign selling was Rs. 30.0Mn.

Analyst’s note
Indices saw a steady movement as company earnings were matched against their market prices. With policy rates held steady for another month, we can expect interest rates to stabilise and the speculation of further drops to subside. Therefore, we can expect a period of consolidation whilst at the same time stocks adjusting according to their earnings and potential.

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