The market rebounded sharply during Thursday’s trading with share prices rising across the board and was dominated by trading in the shares of Sampath Bank, JKH, and DFCC, implying sound investment judgment by astute stock pickers buying fundamentally strong buys.
Evidently, Sampath Bank, were sought after by local and foreign buyers, and buying in this stock persisted both on Wednesday and Thursday fetching prices in the range of Rs.149.00 to Rs.150.00 in the larger transactions, and smaller volumes being traded at Rs.151.90. In 1Q 2012 results, Sampath posted a quarterly profit growing at a staggering 59% when compared with the results achieved for the same period a year ago.
With these results, the P/e of Sampath is relatively low when compared to other stocks in the Banking Sector.
Turnover on Thursday alone reached a figure of Rs.666m and the ASPI and Milanka indices on this single day shot up by 68 points and 62 points respectively. On Thursday, the ASPI closed at 4891.11 points while the Milanka closed at 4331.04 points. News of the overhelming success of Sri Lanka’s bond issue obviously added improved sentiments to the market. The 10-year International Sovereign Bond issue being oversubscribed by 10.5X at USD 10.5b reflects investor confidence by international investors.
Towards the end of the week by Friday, shares at the bourse took a dip due to profit taking and the turnover for the day slid to Rs.284m and the ASPI shed just 2 points.
However, it may be noted that the overall week saw a recovery in the ASPI by 21 points closing at 4888.2 points.
Heavily traded stocks include 3.1m shares in Sampath Bank changing hands in the price range of Rs.149.00 to Rs.151.90, 575,335 shares in JKH trading in the price range of Rs.176.00 to Rs.182.00. With renewed buying interest developing again among small investors, in the plantations sector Udapusselawa witnessed a surge in its stock price increasing 17% to close at Rs.21.00. Other stocks in the plantations sector which traded during the week include Kotagala at Rs.54.90, Namunukulla at Rs.55.20, Kegalle at Rs.92.00 and Balangoda at Rs.23.10.
The average turnover for the week stood at Rs.351m and registered a foreign outflow of Rs.57.9m on average for the week, and a substantial slice of the outflow was recorded on Thursday. A positive sentiment indicator is that the surge witnessed on Thursday saw several stocks advancing in price and we are optimistic that the market will resume once again on a positive note in the week ahead too.
Courtesy: Innovest Investments Pvt. Ltd. an Investment Management Company licensed by the Securities & Exchange Commission of Sri Lanka