Friday, 19 April 2013

LSL Weekly Market Review 19 Apr 2013

Retail participation was up and running soon after the festivities on Tuesday which was promising for all stakeholders. Block trades on banking counters helped to prop up turnover levels with PABC seeing a 15% stake being split amongst 6 trades. Banking counters were also seen regaining momentum whilst Lion Brewery touched an all-time high price of Rs. 340.00.

ASI gained 12.80 points (0.22%) to close at 5,852.68 and the S&P SL20 index gained 18.03 points (0.54%) to close at 3,351.57. Turnover was Rs. 1,580.0

On Wednesday, sentiment remained strong buoyed by interest on blue-chips. Foreign accumulation of blue-chips has seen local investors also building their appetite for equities.  Banking counters and John Keells Holdings continued to be the dominant performers in the market. Retail activity is rallying around the surge in foreign buying. However, investors are cautioned to stick to value investing to minimize unwarranted speculation.

ASI gained 15.85 points (0.27%) to close at 5,868.53 and the S&P SL20 index gained 10.42 points (0.31%) to close at 3,361.99. Turnover was Rs. 611.5Mn.

On Thursday, retail activity surged ahead of institutional interest on stocks. Low-capped and mid-capped counters saw continued retail speculation. Blue-chips retreated on mainly losses on banking and financials. Lower yields on treasuries seemed to have spurred retail activity with the CBSL expecting lower rates going forward.

ASI gained 23.30 points (0.40%) to close at 5,891.83 and the S&P SL20 index lost 10.84 points (0.32%) to close at 3,351.15. Turnover was Rs. 800.9Mn.

Indices closed lower mainly on the losses on blue-chips on Friday. Most banking counters lost marginally on thin volumes. Ceylon Tobacco Company surged ahead with a dividend announcement around the corner. Retail activity which was rallying around foreign was seen taking an off-day. Colombo Land in particular received plenty of retail activity today. Negotiated deals on Commercial Bank took the lion’s share of the turnover.

ASI dipped 9.58 points (0.16%) to close at 5,882.25 and the S&P SL20 index lost 15.03 points (0.45%) to close at 3,336.12. Turnover was Rs. 1,033.9Mn.

Top contributors to turnover were Commercial Bank with Rs. 520.4, Nations Trust Bank with Rs. 54.9Mn and Colombo Land & Development with Rs. 53.3Mn. Most active counters for the day were Colombo Land & Development, Citrus Leisure warrant 19 and HVA Foods.

Notable gainers for the day were Colombo Land & Development up by 8.9% to close at Rs. 41.50, Kelsey Homes up by 8.8% to close at Rs. 16.00 and Beruwala Walk Inn up by 8.7% to close at Rs. 2.50. Notable losers for the day were SMB Leasing down by 10.0% to close at Rs. 0.90, Amana Takaful down by 5.9% to close at Rs. 1.60 and Ceylon Leather Products down by 5.6% to close at Rs. 3.40.

Cash map for today was 38.99%. Foreign participation was 34.7% of total market turnover with net foreign buying at Rs. 491.0Mn.

The Stock Market is like a Beautiful Woman

The stock market is like a beautiful woman, always:

The stock market appeals to everyone - the ignorant and illiterate, barbers and bartenders, brokers and bankers, best and brightest, professionals and people from all walks of life.

Generally, the stock market is perceived as a marketplace to get-rich-quick, make a fast buck, make a killing and turn rags to riches.

The stock market challenges all kinds of players - gamblers, speculators and investors. In the game of sports, amateurs play against amateurs, professionals challenge professionals, and olympians compete with olympians on different level playing fields; whereas in the stock market, novices, amateurs and professionals challenge each other on the same level field.

No wonder so many losers who think they know the stock market lose to so few who know how to “play” and win the stock market game.

The stock market fascinates everybody. It is an animal market - buying and selling sheep, deer, bulls, bears, dogs, cats and pigs.

Winners buy sheep “cheap” and sell deer “dear”. Losers buy deer “dear” and sell sheep "cheap”. Winners are the bulls and bears. Losers are the dogs and cats. "Bulls make money, bears make money, pigs do not"…. a Wall Street axiom.

The stock market captivates different types of players. Gamblers bet on a "story" such as hot tips, insider information, rumors and gossip. Speculators trade on technical charts and price fluctuation. Investors rely on fundamentals and value.

Winners take credit for their skill and smartness. Losers blame everyone (tipsters, stock brokers, investment advisors, portfolio managers, politicians, etc.) and everything (stock market, crisis and bad luck, etc.) except themselves.

The stock market mystifies people. In the marketplace, people "buy low" at wholesale prices, "sell high" at retail prices and make profits. In the stock market, people "buy high" at retail prices and "sell low" at wholesale prices and suffer losses.

"Buy low, Sell high" is a stock market wisdom. It is common sense, but not so common. "Buy high, Sell low" instead of “Buy low, Sell high” is mystifying.

Knowing, understanding and appreciating this beautiful woman is the art of winning the stock market game.