Bourse succeeds to stay up as year-end nears

Wednesday, 29 December 2010 00:36 - - {{hitsCtrl.values.hits}}

The Colombo stock market is succeeding to stay positive as the year end nears though yesterday’s gains were somewhat fragile.

The mere 0.3% gain however was good enough for CSE to bounce back to a near eight-week high, largely driven by retail buying. “The indices continued to trend higher on modest retail buying interest amid healthy activity levels,” John Keells Stock Brokers said. The ASPI gained by 19.58 points whilst the MPI rose sharper by 37 points or 0.5%. Turnover was Rs. 1.6 billion, higher than Monday, whilst foreigners were active though ending up as net sellers. The best performing sector was Trading (+3.21%) whilst the worst was Plantations (-1.75%)

“Indices continued to improve as profit-takers kept on reinvesting across the board. Moderate volumes of certain counters were traded amid foreign participation,” NDB Stockbrokers said.

Bank, Finance & Insurance and Manufacturing sectors were the highest contributors to the market turnover, while sector indices increased by 0.20% and 0.50% respectively.

HNB Bank (non-voting) made the highest contribution to the market with four crossings of 397,000 shares at Rs. 205 while the share price increased by Rs. 4.40 (2.15%) and closed at Rs. 209.40.

Distilleries also contributed to the market turnover although the share price decreased by Rs. 0.60 (0.35%) and closed at Rs. 171.

Three crossings were recorded for 250,000 shares of Commercial Bank at Rs. 261; 75,000 shares of HNB Bank at Rs. 400; and 100,000 shares of DFCC Bank at Rs. 202.

Reuters reported that market gained on hopes of better earnings in 2011. The ASPI’s gain to 6,641.08 points was its highest since 4 November. In 2010, Asia’s best performer has surged 96.2 per cent, with Indonesia, which rose 44.4 per cent, becoming a distant second.

A liquidity shortage, year-end settlements, and impending holidays have hit the island nation’s bourse, which has fallen 7.9 per cent from its record high hit on 4 October.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.6, the highest among emerging markets, compared with 13.1 of Asian emerging markets and 12.1 global emerging markets, Thomson Reuters StarMine data showed.

The CSE’s 14-day relative strength index is at 63.9, towards the upper neutral limit of 70.

On Monday, as many as 88 million shares changed hands, as against five- and 30-day average of 33.2 million and 49.6 million, respectively. The 90-day average volume is 62.4 million.

Sri Lanka’s rupee rose to 110.93/95 a dollar from Monday’s 111.05/08 on inflows for a hotel investment and the Central Bank widening its dollar trading band by 10 cents to 110.85/111.45 from 110.90/111.50, currency dealers said. The local currency has risen 3.07 per cent so far this year.

Meanwhile Asian stock markets were mixed today with the Japanese market weighed by profit-taking while Chinese securities fretted over the possibility of further monetary tightening measures from Beijing. Nikkei fell 0.4%.

The New York Stock Exchange had its lowest full-day volume of the year as a snowstorm compounded what would have been a light holiday session. Dow (0.16%) fell for the first time in four days, hurt by a rate hike in China.