Stock market stays firm with 15% YTD return, Rs. 11 b net inflows
Friday, 1 August 2014 00:31
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The Colombo stock market closed firmly, consolidating its 15% return year-to-date with healthy turnover and continued foreign buying which is now at Rs. 11 billion.
Acuity Stockbrokers said the market ended the month on a positive note with both indices recording gains during the day. The ASPI gained 12.06 points to close at 6813.90 while the S&P SL 20 Index gained 4.33 points to close at 3772.51 points.
Year-to-date, the ASI is 15.24% whilst the S&P SL 20 has gained by 15.58%.
The day’s turnover reached Rs. 1.05 b with crossings during the day amounting to Rs. 405.44 million or 38.8% of the day’s turnover. Foreigners continued to remain net buyers with a net position of Rs. 112.66 million. HNB, Cold Stores and JKH saw net foreign buying.
Year-to-date net foreign inflow is now at Rs. 11 billion. NDB Securities said the indices closed with gains due to price gains in counters such as Union Assurance, CT Holdings and Sri Lanka Telecom.
It said turnover was boosted by block trades in Access Engineering, Royal Ceramics, Hatton National Bank, John Keells Holdings, Commercial Bank and Ceylinco Insurance nonvoting accounting for 39%.
Furthermore, retail interest was evident in PCH Holdings and Browns Investments while mixed interest was witnessed in Janashakthi Insurance.
The Construction & Engineering sector became the second highest contributor to the market turnover (due to Access Engineering) and the sector index lost 0.14%. Access Engineering saw its share price lose Rs. 0.20 (0.78%) to close at Rs. 25.40.
John Keells Holdings and Royal Ceramic were also among the top turnover contributors. The share price of John Keells Holdings closed at Rs. 236.50 depreciating by Rs. 0.50 (0.21%) while the foreign holding of the counter increased by 147,151 shares. The share price of Royal Ceramic closed at Rs. 105.50 depreciating by Rs. 0.40 (0.38%).
National Development Bank’s share price gained Rs. 3.00 (1.41%) to close at Rs. 216.00. The share price of Hatton National Bank gained Rs. 0.50 (0.29%) to close at Rs. 170.50 while the foreign holding of the counter decreased by 310,884 shares.
Reuters said Lankan stocks rose for a fourth straight session to their near three-year closing high on expectation of strong corporate earnings, while declining interest rates and continued foreign buying also buoyed sentiment.
“Earning hopes are still driving the market. Lower interest rates and foreign buying also help,” a stockbroker has told Reuters on condition of anonymity. “We still do not see any overheating because there is holding capacity and healthy credit in the system.”
Brokers has told Reuters the market expects better earnings for the June quarter after market heavyweight and bellwether John Keells Holdings’ upbeat results.
Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said. Yields on Treasury bills edged down further by seven to 10 basis points at a weekly auction on Wednesday.
The International Monetary Fund urged Sri Lanka on Wednesday to keep key interest rates on hold for the near term and said a cautious approach is warranted.
According to Reuters the index has been in the overbought region since 3 July, as local investors moved funds from fixed income to riskier assets because of low interest rates and foreign buying.
