Wednesday, 23 July 2014 00:37
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The Colombo stock market yesterday managed to close on the up thanks to a late rally in buying, which also saw turnover crossing Rs. 1 billion.
In early hours the benchmark All Share Index was down 32 points but posted a rebound ending the day with a near 40-point gain.
Turnover amounted to Rs. 1.4 billion, up from Rs. 904 million on Monday.
NDB Securities said institutional and high net worth investor activity continued to drive the market activity with crossings in blue chip counters.
The gains were mainly underpinned by price progressions in Carson Cumberbatch (closed at Rs. 490, +4.7%), Sri Lanka Telecom (closed at Rs. 56.50, +2.2%) and Ceylinco Insurance (closed at Rs. 1,425.00, +6%).
The S&P SL20 remained positive throughout the day with gains of near 26 points or 0.68%. Bukit Darah topped the turnover list with Rs. 290 million followed by John Keells Holdings (Rs. 267 million) and Ceylon Guardian Investment (Rs. 60 million).
Lanka Securities said gainers offset losers 155 to 83, while 49 counters remained unchanged. Cash map declined to 50% from 67%; 41 counters reached 52-week high price levels.
Reuters reported stocks hit a 34-month closing high on Tuesday, led by banking shares as local investors shifted funds from fixed income to riskier assets in view of the low interest rates.
“The market looks positive. If it continues to go up beyond 6,900 points, we may see a correction with profit-taking,” said a stockbroker asking not to be named.
The share index has gained 6.55% so far this month.
Foreign investors were net buyers of Rs. 213.1 million worth of shares on Tuesday, extending the year-to-date net foreign inflow to Rs. 10 billion in shares.
The market is on the rise because investors have few options in other instruments as yields of treasury bills and the Central Bank’s key monetary policy rates have fallen to multi-year lows amid continued foreign buying. Yields on Treasury bills edged down further at a weekly auction on Wednesday.
Reuters said the index is in the overbought region since 3 July. It has risen 14.94% so far this year.
Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, Reuters said quoting unnamed analysts. Analysts said foreigners have been buying risky assets because they see value in them. (SAA)
