Aug 01, 2008 (LBO) – Sri Lankan stocks closed higher Friday ending the week in positive territory with heavy trading seen in John Keells Holdings, Associated Motorways and Vallibel Power Erathna. Activity could pick up with listed firms reporting quarterly results but brokers said trading was likely to remain volatile and the market could dip on profit taking, given weak economic conditions that will erode corporate profitability.
The All Share Price Index closed up 0.28 percent (6.89 points) at 2,470.30 while the Milanka rose 0.16 percent (4.83 points) at 2,950.60. Turnover was 279 million rupees.
Geeth Balasuriya of HNB Stockbrokers said trading activity could improve with the corporate reporting season underway that was bound to attract investors.
“With corporate earnings attracting investor interest into the market, next week too we expect to see the same trends in activity,” he said.
“But the market will remain volatile with the indices fluctuating within a wide band. And you might not see the (positive) trend continuing for too long as investor sentiment is weak.”
High inflation and interest rates and a slowing economy would erode corporate profitability.
“The volatility will continue quite a bit owing to a mix of profit taking and bargain hunting,” said Balasuriya.
“Profit taking will drag the indices down. At the same time you’ll see some buying support – bargain hunting – coming in.”
In Friday’s trading, JKH closed flat at 100 rupees with 924,300 shares traded.
AMW saw 220,766 shares changing hands at 174.50, the price at which Dubai’s Al Futtaim Engineering took control in Monday’s deal and has announced a mandatory offer.
The other sizeable quantity traded was Vallibel Power Erathna with over 2.8 million shares changing hands although the price ended unchanged at 4.60 rupees.
Dankotuwa Porcelain led the gainers and was the third most actively traded stock.
It closed up 15.79 percent or 1.50 at 11 rupees.
Sri Lanka Telecom went up 25 cents to 47 rupees while Dialog Telekom fell 25 cents to 14.25 rupees, on the volume weighted average price.