Stock market unfazed by Geneva outcome

Saturday, 24 March 2012 00:00 - - {{hitsCtrl.values.hits}}

Despite the Geneva outcome, the Colombo stock market yesterday bounced back ending four sessions of losses.

The All Share Price Index improved by 1.36% or 73 points powered by select blue chips such as JKH whilst turnover was satisfactory as well.

Most analysts linked the bearish trend until Thursday to the uncertainty over the outcome of UN Human Rights Council sessions. However, with it successfully passing the resolution against Sri Lanka ending speculation, the market took a position and recovered, they added.

“The market was resilient despite the negative outcome of the UNHRC,” NDB Stockbrokers said adding that indices remained in the positive territory throughout the day.

Another broker to stress the rebound despite Sri Lanka losing the UNHRC vote was Lanka Securities.

Foreign interest continued in John Keells Holdings (JKH) and helped turnover to improve. A parcel of Blue Diamond was also traded at a premium to the market. Diversified sector was the highest contributor to the market turnover (due to JKH) and the sector index declined by 1.03%. The share price of JKH increased by Rs 3.70 (1.94%) to close at Rs 194.80.

NDBS said speculative counters such as Environmental Resources, PC Pharma and PC House seeing continued interest.

Bank, Finance and Insurance sector was the second highest contributor to the market turnover (due to Commercial Bank and Vallibel Finance - VFIN) and the sector index gained 1.24%. Commercial Bank share price closed flat at Rs 100.00 while the share price of VFIN gained Rs 0.90 (2.47%) to close at Rs 37.40.

Blue Diamond also contributed significantly to the market turnover with its share price appreciating Rs 0.50 (8.77%) to close at Rs 6.20. Reuters quoting unnamed analysts said that many investors remained cautious about interest rates, the rupee and an expected fall in overall company profits.

The day's turnover was Rs. 926.9 million, well below last year's daily average of Rs. 2.3 billion. Volume was 39 million. Last year's daily average was a record 102.7 million.

Foreign investors were net sellers of Rs. 9.3 million on Friday. But they have been net buyers of Rs. 20.1 billion worth of shares so far this year, after a net outflow of 19.1 billion last year.

The Colombo bourse is one of the worst performers this year among Asian markets, with a 10.74 percent loss.