Foreigners return to buying mode as net inflow tops Rs. 800 m

Wednesday, 30 January 2013 01:15 - - {{hitsCtrl.values.hits}}

Year to date net inflow swung back to where it was last week thanks to heavy buying by foreigners yesterday, though quick profit taking by locals stemmed gains in indices.

Foreigners bought Rs. 866 million worth of shares yesterday and sold only Rs. 35 million, resulting in a net inflow of Rs. 830.6 million. This made year to date inflow Rs. 400 million, reversing the negative outflow of an equal amount as of Monday.

NDB Stockbrokers said the net inflow yesterday was owing to the buying witnessed in counters such as Sampath Bank, John Keells Holdings and Lanka Orix Leasing.

Premier blue chip JKH dominated foreign buying for the second consecutive day as it saw foreign holding in the company increase by 1.6 million shares. Overall, 1.73 million shares of JKH traded for Rs. 391 million.

On Monday, JKH saw heavy foreign buying with 2.43 million of its shares traded for Rs. 548 million. An Aberdeen fund picked up over Rs. 300 million worth of shares whilst at least nearly 10 other foreign funds collected available JKH quantities. JKH’s share price gained by one rupee to close at Rs. 226. In value terms, Sampath Bank, the third largest private bank, yesterday saw heavy foreign buying, with its net foreign holding increasing by 0.9 million shares. Overall, 1.95 million Sampath Bank shares traded for Rs. 428 million, topping the turnover list.

Sampath saw a block of 0.75 million shares done via a crossing at Rs. 218.50 per share. In intra-day trading, Sampath reached a 52-week high price of Rs. 221.80 before closing at Rs. 219.60, up by 2.5%.

LOLC was also a recipient of new foreign interest with 3.5 million shares picked up for Rs. 254 million at Rs. 72.50 each.

As exclusively reported by the Daily FT on Monday, Mathews Asia Growth Fund bought into both Sampath and LOLC last week, which saw 0.64 million shares (Rs. 137 million) and 0.83 million shares (Rs. 58.6 million) worth of net buying. The share price of LOLC rose by Rs. 2.30 or 3.40% to close at Rs. 69.90 over Monday.

After a considerable period of lapse, investor interest was noted in manufacturing sector counter Royal Ceramics (-2.7%), whilst interest extended in the construction sector counter Access Engineering.

Softlogic Stockbrokers said that following heavy volatility in the bourse coupled with the slow downward trend during the last few trading days led to a sharp fall in the market indices yesterday, resulting in the benchmark index plunging by 54 points while the S&P SL20 which contains more of the steady lot too experienced a dip, though at a much slower pace, closing down by 9 points.

Dividend play counters Ceylon Tobacco (-4.2%) and Nestle (-2.8%) were the main negative contributors to the index, Softlogic added.

“Although retail investors remained on the sidelines, continued interest from high net worth and institutional investors was seen,” NDBS said, whilst Softlogic noted, “Foreigners led the buy side of the downhill market, understanding the attractiveness of the current market valuations. We advise investors to take maximum use of this opportunity to pick the hidden gems that dip in value.”