Bourse up on blue chip bargain-hunting

Wednesday, 14 December 2011 01:47 - - {{hitsCtrl.values.hits}}

Reuters: Bargain-hunting by foreign investors and retail traders pushed Sri Lanka’s stock market higher in the thinnest volume in a month, and the Central Bank held the rupee steady despite dollar demand from an offshore investor cashing in Treasury bonds.

The main share index closed 0.5 per cent or 29.66 points firmer at 5,994.66, rising from its lowest since 25 November.

The day’s turnover was Rs. 461.7 million ($ 4.05 million), lowest since 11 November, and far below last year’s average of 2.4 billion and this year’s 2.4 billion.

Analysts said some blue chip shares have become attractive again with the 11.63 per cent drop since 1 October.

Since then, investor confidence has been battered by the exit of two top Securities and Exchange Commission officials, a currency devaluation and an Expropriation Bill.

On a net basis, foreign investors bought 357,800 shares in John Keells Holdings PLC, which ended 2.88 per cent firmer at Rs. 182.10.

Despite that, the bourse saw a net foreign outflow of Rs. 5.2 million on Tuesday, and foreign investors have sold 18.3 billion thus far in 2011, and a record 26.4 billion in 2010.

Total volume was 20.9 million shares, against a five-day average of 22.8 million. The 30-day and 90-day average trading volumes were 54.5 million and 96.2 million. Last year’s daily average was 67.9 million.

The Colombo Stock Exchange is Asia’s 12th-best performer with a year-to-date loss of 9.66 per cent after being at the top until June. It delivered Asia’s best returns in 2009 and 2010.

The rupee closed flat at 113.89/90 rupees a dollar for a 15th day despite heavy dollar demand, as the Central Bank spent $ 30 million defending it, dealers said.

Two traders Reuters spoke with said the dollar demand came from a foreign bank, which had facilitated an offshore client’s sale of Sri Lankan Treasury securities. They gave no further details.

Since the 22 November devaluation, the Central Bank has spent around $ 325 million to hold the exchange rate steady. It spent almost $ 2 billion this year until the end of September holding back depreciation pressure.