Average weekly turnover hit LKR 0.8bn for the first time in five weeks after hovering in the LKR 0.3-0.4bn range with turnover mainly driven by execution of the strategic sale in Odel PLC (LKR 1.4bn) to Singaporean Parkson Retail Asia.
"Foreign investor activity consequently improved further this week, and Y-T-D net foreign inflows have now surpassed LKR 25.7bn (relative to an outflow of LKR 8.3bn last year) helped by large transactions such as Parkson Retail’s stake in Odel and Malaysian sovereign wealth fund Khazanah Nasional Berhad’s stake in JKH (LKR 14.5bn) in Q1 2012,’’ the report noted.
"Retail sentiment which has been boosted by knowledge of prospective foreign inflows in the weeks ahead is likely to sustain the current positive momentum.’’
The report further said that with just over 10% of corporates reporting June- quarter earnings so far, approximately 38% of these have shown Y-o-Y declines in earnings.
"Markets however, appear to have already priced this in, and in general (62% of corporates) Y-o-Y earnings have been positive,’’ the report said.
Point-to-point inflation meanwhile, reached a 3.5 year high, hitting 9.8% in July as it continued its upward trend. According to official data, inflation was driven primarily by food price hikes with domestic supply conditions continuing to be affected by the drought, Acuity said.
The ASPI ended the week lower after recording four consecutive days of gains amid slightly improved turnover levels which were largely due to multiple crossings during the week, John Keells Stock Brokers reported.
"The market saw strong net foreign inflows during the week, due mainly to a crossing on ODEL, stemming from the purchase of a 42.19% stake in the company by Parkson Retail Asia.’’