Friday, 11 July 2014 01:02
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The Colombo stock market gathered further momentum as it persisted with double-digit growth and witnessed a welcome return of net foreign inflows.
“The market closed with the ASPI moving up by 55 points mainly owing to price gains in index heavy counters such as Ceylon Tobacco Company, Lion Brewery and Carson Cumberbatch,” said NDB Stockbrokers in its daily reported yesterday titled ‘Double-digit growth sustains’.
Lanka Securities said the Colombo equity market flourished with higher returns on Thursday for the seventh consecutive day in a row, boosting the All Share Index up more than 290.24 points so far for the month.
The main Bourse advanced notably by 55.02 points (+0.83%) to close at 6,668.86 while the S&P SL 20 advanced by 29.08 points (+0.78%) to close at 3,735.14. The year-to-date gain of ASI was 12.8% yesterday and for the S&P SL 20 index it was 14.44%.
The daily market turnover was Rs. 2.4 billion with Acuity Stockbrokers stating high net-worth and institutional buying continued in the Banking and Finance sector.
John Keells Holdings positioned top at the turnover list with Rs. 594 million followed by Nestlé Lanka (Rs. 235 million) and Commercial Bank (Rs. 194 million). Positive price appreciations in primary blue chips such as Ceylon Tobacco (closed at Rs. 1,100.00,+3.1%), Lion Brewery (closed at Rs. 575.00, +8.5%) and Carson Cumberbatch (closed at Rs. 430.00,+3.1%) impacted the index performance. CTC lifted up the ASPI by 15 points while 122 counters contributed positively to the index.
Retail interest was seen in Ceylon Grain Elevators, Colombo Land & Development and CT Land Development.
Foreign investors were net buyers with net inflow of Rs. 350 million as opposed to Rs. 279 million net outflows on Wednesday. Net foreign inflows were seen in Commercial Bank (Rs. 170 million), John Keells Holdings (Rs. 91 million) and Hatton National Bank (Rs. 42 million) while net foreign outflow was mainly seen in DFCC Bank (Rs. 44 million).
LOLC Securities said the foreign stake increased by 379,526 shares. Foreign stake of COMB topped up by 1,141,437 shares while the price closed at Rs. 148.50 (-0.13%). Nations Trust Bank’s share price closed at Rs. 76.00 gaining Rs. 1.20 (1.60%) with the foreign holding of the counter decreasing by 273,492 shares.
The Diversified sector was the top contributor to the market turnover (due to John Keells Holdings and Colombo Fort Land and Building) whilst the Banks, Finance & Insurance sector became the second highest contributor to the market turnover (due to Commercial Bank and Nations Trust Bank)
Reuters reported Sri Lankan stocks rose for a seventh straight session on Thursday to their highest close in 33 months as lower interest rates compelled investors to buy risky assets, while foreign buying also boosted sentiment. It said the ASI has gained 4.5% in seven straight sessions through Thursday.
“We see the resistance level at 7,000. With a P/E ratio of around 14.5, there is still room for gains,” said a stockbroker on condition of anonymity. “I don’t see this as overheating. There could be some profit-taking from time-to-time.”
Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on Treasury bills edged down further at a weekly auction on Wednesday.
As per Reuters analysts, foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities.
The market has been on a rising trend since late February due to continued foreign buying and lower interest rates.
