Bourse overtakes 2013 full year gain in 22 days of 2014!
Thursday, 23 January 2014 00:35
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Net foreign buying nears Rs. 1 b mark
The Colombo stock market is showing signs of greater buoyancy, with the benchmark All Share Index surpassing the 2013 full year gain in the first 22 days of the New Year.
As opposed to the 4.78% rise in the ASI in 2013, improved sentiments of late saw the Index closing yesterday with a 5% gain year-to-date in 2014. The gain of S&P SL20 Index was 6%, whereas it ended 2013 with 5.79%.
Though it is too early to make a definitive prediction and full year performance could fluctuate, the Colombo Bourse has been up by 4.5% during the last 10 market days due to several reasons.
Yesterday’s closing is an over-five-month high or highest since 19 August 2013. Reuters linked the rebound to expectations of more foreign fund inflows after an investor roadshow in Singapore earlier this week boosted sentiment.
“The market is confident of more foreign investments into stocks from Singapore,” Reuters quoted an unnamed stockbroker as saying.
“The sentiment is positive with low interest rates, and retail investors are also slowly coming into the market.”
However, Reuters said the index has been in an overbought region since 7 January. NDB Stockbrokers said the Bourse closed positive with activity picking up and the index crossing the 6,200 resistance level.
“Activity was spread throughout the broader market as blocks traded in counters Chevron Lubricants, Commercial Bank and Hayleys, amounting to 15% of the turnover. Foreigners were seen active, with interest evident in counters Expolanka Holdings, Commercial Bank and Textured Jersey, with foreigners becoming net buyers due to buying seen in John Keells Holdings. In addition, interest was seen in Nation Lanka Finance, SMB Leasing and The Finance Company nonvoting,” NDBS added.
Softlogic Stockbrokers said indices depicted a bullish trend amidst healthy volumes which carried the turnover past Rs. 1.3 b. Blue-chips continued to lead the gains as the ASPI gained 59 points at its close, reflecting gains for John Keells Holdings(+1.0%), Ceylon Tobacco Company (+2.0%) and Chevron Lubricants (+3.7%). The S&P SL20 index followed suit with a gain of 30 points.
Officials from the Colombo Stock Exchange and the Securities and Exchange Commission, along with some top company officials and brokers, were in Singapore for a roadshow on Monday to attract more foreign funds.
Foreign investors were net buyers of Rs. 290.7 million worth of shares, extending the year-to-date net inflow to Rs. 974.7 million. They had bought Rs. 22.88 billion of stocks last year.
First Capital Equities said even though the 4Q2013 corporate results were yet to be released, it did not expect the ASPI to change its upward trajectory over the next few days.
“Better than expected corporate earnings could provide further market support. Consequently, we recommend investors to enter the market on a selective basis taking advantage of any price weakness in the market,” the broking firm added.
