4 in 1

Monday, 1 November 2010 01:45 - - {{hitsCtrl.values.hits}}

Stock market’s 2010 year-to-date turnover at Rs. 477.8 billion last week surpasses combined value of past four years; with two more months to go, 2010 fancied to make it 5 in 1.

In a reaffirmation of its resilience, the Colombo stock market has notched up another achievement by surpassing the collective turnover of the past four years by last week.

The combined turnover between 2006 and 2009 was Rs. 463 billion whilst the Colombo bourse began last week short of Rs. 13 billion to surpass the former figure. Thanks to a few strategic deals, including transfers, turnover last week rose to the highest of Rs. 27.5 billion. This increased the year-to-date figure to Rs. 477.82 billion, comfortably surpassing the combined value of past four years.

If 2005 is also included, the combined turnover of the past five years is Rs. 577.6 billion and some analysts fancy that 2010 may even beat that as there are about nine more weeks before the year ends. To do so, the bourse only needs a further Rs. 100 billion.

Falling within these nine weeks is also the post-Budget week and analysts opined that if the Government delivers what is dubbed as the best-ever Budget, investors are likely to toast it in style. The month of October was the best-ever in terms of turnover, with value being a staggering Rs. 84 billion, whilst in September it was Rs. 76 billion.

The Rs. 477.8 billion January to October turnover is high by 236% or a whopping Rs. 335 billion over the full year figure of 2009. On all counts, 2010 is heading to be the dream year for the Colombo stock market, analysts added.

Colombo, with a year-to-date return of 97%, is Asia’s best performing market, though slightly down from the peak of 104% in mid September.

Investor sentiments to be strong this week

Acuity Stockbrokers said that strong investor sentiments are expected this week after the Bourse returned to improved performance last week.

It said that last week’s trading at the Colombo bourse was active, with healthy turnover driven by internal strategic investments by institutional and retail investors taking positions on the expectation of a positive earnings season.

“The initial indication of the results released so far is that the corporate sector has recorded sound growth levels stemming from operational earnings and gains made in financial and capital markets. Retail investors seem to be keen on IPOs and have shown their appetite for primary markets.

We expect the current sentiment to continue into the week ahead,” Acuity said.

The broker also noted that the positive growth momentum of the country thus far has factored into the equity market through a continued uptick in the indices. ASPI has gained 90% year-to-date, currently at 6,600 level. The share price appreciation was backed by improved corporate earnings in 2010 so far, Acuity added.

Last Friday, the Daily FT featured a special report by NDB Stockbrokers saying there was no bubble in the market.

“While we note that share prices have appreciated rapidly over the last 18 months, we do not believe a bubble has been created yet, in view of the P/E valuations based on earnings estimates for FY10/11,” NDB Stockbrokers said.