Bourse up as sentiment improves; net foreign inflow tops Rs. 37 b mark

The Colombo stock market saw a rebound thanks to improved investor sentiments whilst foreigners’ persistent buying has helped the net year-to-date inflow top the Rs. 37 billion mark.

The ASI gained by 64 points or 1.2% and MPI by 42 points or 0.8%. Turnover was Rs. 877 million.

Foreign buying amounted to Rs. 641.5 million whilst selling was Rs. 521 million, resulting in a net inflow of Rs. 120.2 million. Wednesday’s inflow of Rs. 702 million largely contributed to push the net year-to-date figure above the Rs. 37 billion mark, an all-time high.

“The Bourse saw a heavy upward movement following a long lapse. Improved market sentiment and activity was witnessed in the Bourse,” Softlogic Stockbrokers said.

The ASI’s gain was led by the gains in Nestle (+8.0%), Bukit Darah (+2.2%), John Keells Holdings (+0.7%) and Nation Lanka Finance (+1.2%).

“Large crossings dominated the turnover accounting for 63% of the turnover. Nine crossings were reported during the day with most in blue chip counters. It is noted that institutional and foreign buying remains strong as YTD net foreign inflow crossing the Rs. 37 billion mark,” Softlogic said.

Distilleries and National Development Bank enjoyed top slots in the turnover list with each counter recording two crossings each. Crossings in the former counter accounted for 841,000 shares at Rs. 151 each. The counter is trading at valuations of 7.4x FY13E earnings and PBV of 1.1x on FY13E book value. The latter counter, which was involved in the sale of its insurance arm, continued to gain interest with crossings amounting to one million shares at Rs. 125.

Further crossings were recorded in Environmental Resources Warrants W:0003 and W:0006 with 25 million and 26 million shares changing hands at Rs. 3.5 and Rs. 3.9. JKH, Nestlé and banking sector counter Seylan Bank [Non-Voting] also recorded crossings with 127,000 29,000 and 1.1 million shares changing hands at Rs. 210, Rs. 1,350 and Rs. 35.

Investor play was also noted in Ceylon Theatres (+3.3%), Central Finance (+0.6%), Aitken Spence (+0.9%) and Sampath Bank (+2.2%) with all counters recording mid-sized on-board blocks.

Lanka Securities said in terms of the technical indicators market RSI, the All Share Index increased to 41 from the previous figure of 29. “The five day moving average line is just about to cross the 10 day moving average from the bottom, which can be considered as a short-term bullish crossover. Cash map excluding crossings improved to 56%, suggesting the return of bargain hunters to the stock market,” the broking firm added.