Bourse’s rebound persists

The rebound at the Colombo stock market continued for the second day with its value rising by a further Rs. 9 billion as retailers moved in amidst institutional local and foreign activity.

The ASI gained 25 points to its highest level since 21 March and up 2% year to date whilst turnover was Rs. 1.6 billion largely on account of heavy foreign-to-foreign deals.  

The blue chip S&P SL 20 Index was up near 14 points and its year-to-date return was higher at near 8%.

Foreign investors were net buyers of Rs. 17.3 million worth of shares, many of them bank shares, extending the year-to-date net foreign inflow to Rs. 5.66 billion.

Turnover shot up following the deal in Nations Trust Bank, which contributed 69% of turnover as 8% stake or near 19 million of its shares traded at Rs. 59 each.

“Positive investor sentiments persisted in banking sector counters such as Sampath Bank, National Development Bank, Union Bank and Commercial Bank, and resulted in the sector contributing to over 90% of the day’s turnover,” NDB Stockbrokers said.

Softlogic Stockbrokers added banks continued to be the highlight of the day with 52-week high prices being recorded Union Bank (+6.2%), National Development Bank (+0.2%) and DFCC (+2.9%) while further strong buying was noted in Sampath Bank (+0.4%), Commercial Bank (+1.6%) and Pan Asia Bank (+6.1%). All counters ended in the green with strong gains during the day.

“It was encouraging to see plenty of retail activity on smaller capped banking counters,” Lanka Securities said

Notable gainers for the day were Ceylon Leather Products up by 14.9% to close at Rs. 79.30, Merchant Bank of Sri Lanka up by 12.1% to close at Rs. 18.60 and HDFC up by 10.7% to close at Rs. 45.40.

“With regard to the market trajectory, heading towards the end of the week, the bourse is likely to continue to trade range bound in the short term in the absence of any significant news that would provide a strong impetus for a break to the upside even though valuation multiples for select companies have become relatively appealing,” DNH Financial opined.