Daily Trade Journal – CSE Diary for 18.09.2012
Sri Lankan stocks reverted to red, putting a halt to the bull run that prevailed over the past 14 consecutive sessions. Indices which lost track of an appropriate direction during the morning trading hours, followed a steep downward trend thereafter primarily led by profit taking as the ASPI touched a low of 5,897.8 points (down 71.3 points), before witnessing a slight recovery to close the day at 5,910.8 points. The liquid MPI suffered a steeper loss of 87.5 points drop to close at 5,542.9 points. Substantial declines were denoted in John Keells Holdings (-1.09%), Commercial Bank (-1.6%), The Lanka Hospital Corporation (-3.8%), Colombo Land & Development (-5.1%), Brown & Co. (-5.8%) and Colombo Fort Land & Building (-3.3%) from the MPI calibre. Nevertheless, the S&P SL20 managed to close with a lesser 32.9 point dip at 3,177.7 points.
We believe that today’s slip is highly reasonable provided the aggressive bulls we witnessed over the past four trading weeks leading the market to generate very attractive returns over a short span of time. Despite having surged more than 1,000 points, the bourse is still abundant with attractive value stocks. Investors should now carefully allocate their funds clearly identifying value based on earnings potential and attractive asset values.
Retail & high net worth interest heaved up in Nation Lanka Finance as the counter emerged to spearhead the day’s turnover list supported by a number of large trades drawn in the market. The counter touched a high of LKR15.9 (+11.9%), before closing at LKR15.0 (+5.6%). Heavyweight, John Keells Holdings yet again proved to be heavily sought after as it saw a large block of 287k shares being handled in the market at LKR219.5. The counter shed 2.4% at its close of LKR217.0.
Banking sector players continued to be among the top turnover list with notable activity in Sampath Bank (-0.5%), Commercial Bank (-1.6%), Hatton National Bank [Non – Voting] (+0.2%), Seylan Bank [Non – Voting] (+1.16%) and Nations Trust Bank (-0.9%). Non – Voting share of Hatton National Bank saw several large on board deals including a c.301.8k share parcel at LKR115.0.
Heavy retail and high net worth play continued in Kalpitiya Beach Resorts (-4.3%), whilst its related companies Citrus Leisure and Waskaduwa Beach Resorts also secured interest. Meanwhile active renewed play was evident in Central Investment and Finance as it surged to touch its 52 – week high of LKR11.8 (+49.4%). The counter settled to close at LKR10.6 with an advance of 34.2%. Further large on board trades in Browns Beach Hotel, led it to renew its 52 – week high point at LKR27.9 (+19.2), where it closed with a staggering 16.7% appreciation at LKR27.3.
Heavy accumulation was evident in Expolanka Holdings as the counter saw a number of large on board trades as it closed at LKR7.9 (up 1.3%). Interest also stayed in Access Engineering and Serendib Hotels.
European Stocks Fall Most in Two Weeks as Euro Weakens With Oil: European stocks fell the most in two weeks, the euro weakened and Spain’s bonds declined on concern the nation will seek financial aid. Chinese shares slumped amid escalating tensions with Japan, while oil extended its biggest drop in two months. The Stoxx Europe 600 Index lost 0.5% at 8:05 a.m. in London, while Standard & Poor’s 500 Index futures were little changed.
Oil Extends Decline in New York After Biggest Drop in Two Months: Oil extended its decline after the biggest drop in two months on speculation that a slowing US economy may curb fuel demand. Oil for October delivery fell as much as 64 cents to USD95.98 a barrel in electronic trading on the New York Mercantile Exchange and was at USD96.05 at 3:30 p.m. Singapore time.