Bourse begins festive month on a strong note; net foreign inflows top Rs. 20 b
- Market cap gains by Rs. 51 billion sustaining the rebound on Friday
- Net foreign flows during past 18 market days top Rs. 6 b
- Turnover below daily average as some investors remain cautious over politics
The Colombo stock market began the festive and year end month on a strong note and net foreign inflows remaining robust though relatively low turnover exposed the local caution over politics.
The rebound seen on Friday continued yesterday as market saw its value rise by Rs. 51 billion, reflecting a year to date growth of over 25%. The All Share Index gained 1.7% and S&P SL 20 Index by 1.8% further cementing the recovery. Year to date positive return of the Colombo Bourse remains at 23%.
More significantly, foreigners remained net buyers pushing the year to date inflow to over Rs. 20 billion.
Lanka Securities said foreign investors have been net buyers since 5 November and the total net inflow during the past 18 session amounted to Rs. 6.2 billion.
Yesterday net foreign inflows were seen in counters such as Access Engineering (Rs. 201mn), Lion Brewery (Rs. 48mn) and Distilleries (Rs. 30mn) while net foreign outflow was mainly seen in John Keells Holdings (Rs. 45mn).
Price inclines in index-heavy counters such as Commercial Bank (up 4% to Rs. 165), John Keells Holdings (up 2.2% to Rs. 246), and Nestle (up 2.4% to Rs. 2,160) contributed notably to the ASI improvement.
Lanka Securities said out of 261 counters, 208 advanced, 23 slipped and 30 counters remained unchanged. Cash map advanced from 52% to 61%.
Turnover was Rs. 982 m with Access Engineering emerging as the top contributor with Rs. 241 m supported a crossing of 5 m shares at Rs. 38.50. Shares of Asia Asset Finance (Rs. 2.10, +16.7%), Lanka IOC (Rs. 60.40, +6.0%), Access Engineering (Rs. 38.10, +3.3%) and Lanka Cement (Rs. 4.60, +15.0%) attracted heavy investor interest during the day.
Reuters reported that stocks ended firmer due to bargain hunting amid lower volumes while turnover hit a 5-week low as investors, fearing political uncertainty, stayed off risky assets ahead of the presidential election next month. It said the main stock index edged up from its lowest since 5 September hit on Thursday.
“There was some bargain hunting in the morning session, but the sudden upswing is not really supported by the volumes,” Reuters quoted a stockbroker on condition of anonymity. “Still, worries over political uncertainty remain.”
Active domestic investors helped push the market higher, analysts said.
Some investors said the declines in prices have made stocks an attractive buy at current levels.
Nine loyalists from President Mahinda Rajapaksa’s United People’s Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since Rajapaksa announced the snap presidential poll on 20 November. Sirisena is contesting against Rajapaksa as the consensus candidate of a united Opposition in the 8 January election.
Speculation over more defections also weighed on sentiment, analysts said.
