LSL Weekly Market Review 15th Mar 2013

Market opened on a positive note on Monday but the main index dropped after mid-day on retail selling. It’s assumed as a result of retail investors taking a cue from recent upward pressure on interest rates. News of Cargills/CT Holdings securing IFC backing for their bank failed to show a marked gain on their prices. ASI dropped 14.08 points (0.25%) and the S&P SL20 index gained 6.45 points (0.20%). Turnover was Rs. 557.0Mn.

On Tuesday, indices gained on the back of improved buying activity on blue-chips such as John Keells Holdings, Commercial Bank and Ceylon Tobacco Company. National Development Bank rose by around Rs. 3.00 on relatively thin volumes as investors expect a lump sum final dividend. Foreign buying on blue-chips has driven the market from last year’s low levels and we expect this trend to continue in the mid-term. ASI gained 27.01 points (0.48%) and the S&P SL20 index gained 17.90 points (0.55%). Turnover was Rs. 671.6Mn.

Retail selling prevailed on Wednesday although few blue-chips sought by foreigners gained marginally. John Keells Holdings and National Development Bank reached their 52-week highs of Rs. 239.00 and Rs. 157.00. Ceylon Tobacco Company saw another lackluster day with buying interest slowing. Yields on all treasuries rose by 5 basis points each which further illustrate the negative footing of retailers.  ASI lost 18.50 points (0.32%) and the S&P SL20 index lost 11.85 points (0.36%). Turnover was Rs. 447.0Mn.

A late surge in blue-chips helped to recover from mid-day losses on Thursday. John Keells Holdings and National Development Bank continued to improve their 52-week highs to Rs. 239.00 and Rs. 158.50 respectively. Few blue-chips are trading beyond their intrinsic values therefore we advise investors not to get into the herd instinct but stick to value investing. ASI gained 3.16 points (0.06%) and the S&P SL20 index gained 5.79 points (0.18%). Turnover was Rs. 609.2Mn.

Indices closed higher on Friday driven by gains on foreign-favourite blue-chips such as John Keells Holdings, Ceylon Tobacco Company and Commercial Bank. Meanwhile National Development Bank continued to rise on speculation of a large final dividend. However, retail counters seem to be losing interest amongst investors who seem to be looking for steady returns with blue-chips. ASI gained 15.55 points (0.27%) to close at 5,704.53 and the S&P SL20 index gained 21.41 points (0.66%) to close at 3,262.44. Turnover was Rs. 729.9Mn.

Top contributors to turnover were John Keells Holdings with Rs. 269.3Mn, Bukit Darah with Rs. 97.5Mn and National Development bank with Rs.  87.0Mn. Most active counters for the day were PC House which announced a 1:2 rights issue at Rs. 3.00, National Development Bank and John Keells Holdings.

Notable gainers for the day were Citrus Leisure warrant-19 up by 8.3% to close at Rs. 2.60, Ceylon tea Brokers up by 4.1% to close at Rs. 5.10 and Kelani Tyres up by 3.0% to close at Rs. 33.90. Notable losers for the day were PC House down by 12.6% to close at Rs. 3.20, Panasian Power down by 3.7% to close at Rs. 2.60 and Nawaloka down by 3.3% to close at Rs. 2.90.

Cash map for today was 57.53%. Foreign participation was 25.74% of total market turnover whilst net foreign buying was Rs. 335.5Mn.