Comments /826 Views / Friday, 21 April 2017 00:00
Reuters: Shares hit a more than six-month closing high on Thursday as retail investors too joined a market rally led by heavy foreign buying over the last 20 sessions.
Foreign investors net bought Rs. 697.5 million worth equities on Thursday, after buying a net Rs. 4.32 billion on Wednesday, the highest since 9 May 2014. Foreign investors have bought equities worth a net Rs. 10.42 billion in 20 straight sessions, taking the year-to-date inflow into equities to Rs. 12.9 billion.
On Thursday, the Colombo stock index ended 0.9% firmer at 6,505.28, its highest close since 12 October.
The index has climbed 8.9% in the 15 sessions up to Thursday, having risen for 14 outs of 15 sessions so far.
“Foreigners are buying in large quantities and we saw some retail investors also buying stocks in a gradual manner,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.
“The bullish run will prevail if the Central Bank can maintain the interest rate at the current level.”
The Central Bank last month raised the key policy rates by 25 basis points.
Turnover stood at Rs. 1.44 billion ($9.48 million), more than this year’s daily average of Rs. 863.7 million.
Large cap Nestle Lanka PLC jumped 3.8%, while top mobile phone operator Dialog Axiata closed 3.5% firmer.
The country’s biggest superannuation fund, EPF, has invested in only nine stocks in 2016 down from 47 in 2012.
EPF’s total new investment in listed companies last year amounted to Rs. 1.3 billion, as opposed to Rs. 5 billion in 2012, Rs. 8.1 billion in 2013 and Rs. 4.8 billion in 2014. In 2015 it was Rs. 1.28 billion.
The book value of all listed equity investments as at end 2016 was Rs. 70.58 billion or 4% of EPF’s total portfolio of Rs. 1.77 trillion.
Details of the EPF listed equity investment portfolio was revealed by the Central Bank last week in response to a request for the same by Transparency International Sri Lanka under the Right to Information Act No. 12 of 2016.
The nine stocks into which investments were made in 2016 were ACL Cables, Access Engineering, CIC Holdings, Ceylon Guardian Investments, Dialog Telecom, Haycarb, Lanka IOC, Peoples Leasing, and Tokyo Cement.
The bulk of the EPF’s funds (93.13% or Rs. 1.65 trillion) had been invested in Government securities. Investment in corporate debentures amounted to 1.94% or Rs. 34.3 billion and unlisted equity amounted to Rs. 10.2 billion.
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