Stock market stays up on return of confidence; foreign buying
- nYear-to-date net foreign inflow nears Rs. 19 b with infusion of Rs. 712 m yesterday
- nMarket’s value up byRs. 50 b in two days
The Colombo stock market succeeded to stay on the up for the second consecutive day with investor confidence returning and heavy foreign buying.
The benchmark All Share Index gained over 1% of 63 points bringing the year-to-date growth to 1.55%. Market capitalisation improved by Rs. 26 billion on top of an equal amount on Tuesday.
What was significant in the late rebound is a net foreign inflow of Rs. 712 million bringing the year-to-date figure to Rs. 18.9 billion. Bulk of the inflows yesterday were on John Keells Holdings which saw Rs. 846 million in turnover including six crossings involving 1.4 million shares at Rs. 209.
The counter closed flat at Rs. 209 after hitting an intra-day high of Rs. 212. It was the ninth consecutive day of JKH dominated turnover at the CSE. JKH and trading of Rs. 123 million of Sampath Bank shares accounted for 82% the CSE’s total yesterday. Sampath also saw foreign buying.
“The Bourse continued yesterday’s positive momentum, with the benchmark ASPI recording a triple digit growth for the two days. Turnover crossed the billion mark for the first time in three weeks,” NDB Stockbrokers said. It said retail activity was seen in counters such as Blue Diamond Non-voting, Central Investment & Finance and Panasian Power.
“Indices depicted a volatile path as the ASPI denoted a marginal downtrend during mid-day and restored back its gains to close up 62 points at 5,730.21. The upturn was primarily backed by Ceylon Tobacco Company (+8.6%), Lion Brewery (12.8%), Chevron Lubricants (+3.8%) and Commercial Bank (+0.7%). The S&P SL20 follow suited ending with a gain of 28 points at 3,178.96,” Softlogic Stockbrokers said.
It added that retail activity was moderate with the upturn of indices. HVA Foods, E-Channelling and Blue Diamond [Non-Voting] saw notable activity.
LOLC Securities said foreign holding in JKH rose by 2,673,783 shares, that of Sampath Bank by 626,000 and of Commercial Bank by 295,718.
Reuters said the Bourse, which had been in an oversold region since 3 September, shot up to neutral territory, with the 14-day Relative Strength Index at 37.089 on Wednesday, above its lower neutral level of 30.
Analysts said a fair number of public and private institutional investors as well as high net worth investors were active on fundamentally sound stocks though retail activity could be much better.
First Capital Equities believes that the current price weakness in the Bourse provides an excellent opportunity for medium to long-term investors to pick up attractively priced growth stocks.
“While positive market sentiment appears to be building up, we continue to advice investors to enter the market in a focused and informed manner carefully selecting counters that will fully benefit from the positive domestic economic story,” it added.
