Foreign buying fuels rebound; net inflow now at Rs. 21.5 b
Bullish sentiments from foreign investors saw the Colombo stock market bounce back yesterday thereby boosting the net inflow to an impressive Rs. 21.5 billion while when TPG Capital acquisition of Union Bank stake is factored in, the net figure is Rs. 33 billion.
Lanka Securities said foreign investors closed as net buyers for the 20th consecutive session with a net inflow of Rs. 666 million. Foreign participation was 31%. Net foreign inflows were seen in counters such as John Keells Holdings (Rs. 380 m), Access Engineering (Rs. 220 m), Commercial Bank (Rs. 19 m), Tokyo Cement (Rs. 15 m) and Hemas Holdings (Rs. 14 m). NDB Securities said foreign activity accounted for 58% of yesterday’s turnover of Rs. 1.2 billion.
Reuters citing CSE data said year to date net foreign inflows were now at Rs. 21.56 billion. Brokers noted that if Rs. 11.4 billion foreign investment in to Union Bank’s private placement for 68% stake in September, the net inflows figure amounts to Rs. 32.9 billion.
Asia Securities said the Bourse continues to remain attractive to foreign investors with Rs. 665.2 m inflow while local investors were active locking in profits.
The main index rebounded on thin trade with market volume and turnover being recorded below the 12-month average.
Core index bagged 43.85 index points or 0.61% to end at 7,274.43 while 20-scrip S&P SL index advanced by 41.79 index points or 1.04% to close at 4,066.92. Positive price increases in counters such as John Keells Holdings (closed at Rs. 253.60, +3.0%), Dialog Axiata (closed at Rs. 13.10, +2.3%) and Sri Lanka Telecom (closed at Rs. 48.00, +1.5%) contributed favorably to the index performance.
Subsequent to the announcement of interim dividend, Chevron Lubricants counter reached to Rs. 360.10 and closed at Rs. 360.00 (+2.9%).
John Keells Holdings emerged as the top contributor to the turnover with Rs. 481 m underpinned by several crossings of 1.1 m shares at Rs. 254-255. Access Engineering and Sanasa Development Bank were among the next best contributors to the turnover with Rs. 236 m and Rs. 41 m respectively.
Penny stocks such as Lanka Cement, Sierra Cables and Central Investments and Finance attracted heavy investor preference during the day.
NDB Securities said high net worth and institutional participation was witnessed in John Keells Holdings and Access Engineering as parcel trades. Mixed interested was observed in Sanasa Development Bank, Union Bank and Sierra Cables. Furthermore, retail interest was noted in Lanka Cement, The Finance Company and Central Investments & Finance.
Reuters said Sri Lankan stocks ended firmer on Wednesday with investors picking up select blue-chips like John Keells Holdings Plc and foreign investors and some local institutions buying into risky assets.
However, investors were still cautious due to political uncertainty ahead of the 8 January presidential poll, analysts said.
“John Keells led the market. We have seen some foreign activities. Local institutions and some state funds were also looking to buy,” said a stockbroker asking not to be named. Analysts expect volatility to continue and the overall index to be flat until the elections.
Nine loyalists from Rajapaksa’s United People’s Freedom Alliance, including Health Minister Maithripala Sirisena, have defected since the president announced a snap poll on 20 November Sirisena is contesting against Rajapaksa as the consensus candidate of a united opposition.
Speculation that more loyalists would defect in coming days and likely violence ahead of polling also weighed on sentiment, analysts said according to Reuters.
