Bourse boom gathers steam

Friday, 11 February 2011 02:07 - - {{hitsCtrl.values.hits}}

Market’s value soars by Rs. 39 b in one day; Market Cap now at Rs. 2.5 trillion; Year to date ASI growth 13%

The Colombo stock market yesterday rose sharply powered by all round buying with improved investor sentiments.

The value of the Colombo Bourse shot up by Rs. 39 billion in a single session increasing the total to Rs. 2.5 trillion. A sharp rise of 1.6% or 116 points in ASI saw the year to date return reach 13% reinforcing its Asia’s best performer status.

“Institutional and high networth investor participation was witnessed during early trading. A fresh round of retail buying further boosted ASPI during the latter part of trading. MPI was choppy during the day but ended on a positive note,” NDB Stockbrokers said.

Bank, Finance & Insurance and Manufacturing sectors were the highest contributors to the market turnover while both indices increased by 1.26% and 0.88% respectively.

Turnover was Rs. 4.9 billion rupees, more than this year’s daily average Rs. 3.9 billion and the last year’s Rs. 2.4 billion. Traded share volume was 113.7 million, against a five-day average of 121.7 million. The 30-day and 90-day average trading volumes were 98.9 million and 70.9 million respectively. Last year’s daily average volume was 69.2 million.

The only drawback was foreign investors selling a net Rs. 542.1 million worth of shares extending the total net foreign outflow to Rs. 4.7 billion so far in 2011, after selling a record net Rs. 26.4 billion in 2010. Reuters said heavy retail buying has pushed it deeper into the overbought region with 14-day relative strength index at 83.9.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.2, one of the highest among emerging markets, compared with 12.7 in Asian markets and 11.7 in global emerging markets, Thomson Reuters StarMine data showed.

The rupee closed flat at 110.98/111.00 a dollar as a state bank, through which the Central Bank directs the market, sold dollars at a flat 111.00 rupees despite heavy dollar demand from importers and stock-related outflows, dealers said.