Bourse’s negative return back to 20% as SEC move fails to spark

• YTD net foreign inflow of Rs. 24 b only silver lining

The granting of greater flexibility on broker credit to clients failed to bolster a credible rebound in the Colombo Bourse as it got back to over 20% mark in year to date negative return mark.

The benchmark ASI lost 27.07 points to close at 4,853.03 points (-0.6%) whilst the Milanka Price Index shed 23.19 points to close at 4,285.62 points (-0.54%) after gaining in early morning trade.

Some expected the market to rebound after the SEC relaxed some previous rules on broker credit but as feared by others, minor tinkering failed to spur an overall rebound.

There was some confusion within brokers with some alleging the extension of credit for 120 days wasn’t what the industry requested whereas the recommendation has been overall removal of time bound limits with brokers providing for their respective exposures.

The ASI is around 116 points from hitting the 2012’s lowest level as the index moved back to over 20% negative return threshold. MPI topped the 18% mark. Value wise, the market has lost over 16% or over Rs. 300 billion year-to-date.

The only silver lining remains the net foreign inflow crossing the Rs. 24 billion mark by yesterday, a record given the massive outflows since 2009.

NDB Stockbrokers said market commenced the day witnessing retail activity and interest being continued in both LAUGFS Gas voting and non-voting. Accumulation continued in Carsons and Commercial Bank non-voting whilst Asian Hotels and Properties saw renewed interest.

Heavyweight John Keells Holdings continued to lose ground making the indices slide further. Turnover levels remain low due to absence of institutional and high net worth participation, it added.

Softlogic Stockbrokers said indices marked its stay in the red on the back of low investor sentiment continuing its trend of low trade volumes. Retail activity prevailed to spearhead the bourse while fundamentally sound blue chips dominated the turnover suggesting silent accumulation amidst the downturn.

It said one dipped for every counter that gained with the move towards the negative territory being mainly driven by Aitken Spence (-3.31%), Sri Lanka Telecom (-2.06%) and John Keells Holdings (-0.78%). The S&P SL20 took a downturn with CT Holdings (-3.57%), Aitken Spence (-3.31%) and Hayleys (-3.17%) being the top losers for the day.

Investors continued to sought after the high dividend yielding counter LAUGFS Gas which reached an intra-day high of Rs. 17.40 (+8%) before closing at Rs. 16.30, followed closely by its voting share persisting to be a top performer for the day dipping -1.30% to close at Rs. 22.80.

High market caliber counter Sampath Bank attracted investor attention as c55k shares were picked on board at Rs. 150 during the initial trading hours leading way to spearhead the day’s turnover. It trades at a PER of 5.2 on 2012E earnings. Another banking sector counter Seylan Bank touched a 52 week low of Rs. 49 whilst it traded at an intra-day high of Rs. 53.00 (2.9%) to close at Rs. 51.

Liquid counter Free Lanka Capital Holdings witnessed 550k shares being picked on board at Rs. 1.80 while 288,000 shares of Piramal Glass changed hands at Rs. 5.10. Vidullanka (Rights) saw large blocks amounting to 1.18 million shares dealt on board at 10 cents each.