Bourse at 3 week high

The Colombo stock market opened a fresh week on a positive note which was good enough to end yesterday at a three week high.

“Market has been gathering momentum from last week with the indices gaining marginally today as well. Investors seem to be responding well to the interim results of several companies. A favourable market can be expected this week,” NDB Stockbrokers said.

“The indices gained further despite low activity levels with modest buying interest across most sectors, while foreign participation continued to account for a net outflow,” John Keells Stock Brokers said.

Reuters said benchmark ASPI hit a three-week high as strong earning hopes and tax cut expectations in the 2011 budget helped boost buying in diversified and banking shares.

ASPI rose 74.38 points or 1.11 percent to 6752.43. It is Asia’s best performer in 2010 with a 99.5 percent gain as the island’s economy rebuilds after the end of a civil war in May 2009. It hit a record high of 7,207.75 on Oct 4.

Bank Finance & Insurance and Diversified sectors were the highest contributors to the market turnover, while the sector indices increased by 0.38% and 2.45% respectively.

Commercial Bank made the highest contribution to the market turnover while the price increased by Rs 7.70 (2.89%) and closed at Rs 275.

Sampath Bank also contributed to the market turnover with two crossings of 350,000 shares at Rs 280 although the price declined by Rs. 4.70 (1.65%) and closed at Rs. 280.10.

Another crossing was also recorded for 50,200 shares of Ceylinco Insurance at Rs. 400.

Asia Securities said the Colombo Bourse initiated the week on a positive note with Commercial Bank spearheading the market making up nearly circa 14% of the day’s turnover on the back of institutional buying whilst high net worth and institutional buying was evident in heavy weight John Keells Holdings. Sampath Bank and Distilleries witnessed institutional participation with Environmental Resources Investments continuing to see retail interest during the day.

Lanka Tiles and Commercial Bank declared interim dividends of Rs 1 and Rs 1.50 per share respectively. Hemas Holdings also announced Rs.0.25 per share interim dividend for 2010/11 financial year.

The Bourse is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 20 times, compared with 13.3 and 12.7 respectively, Thomson Reuters StarMine data shows. The CSE’s 14-day relative strength index is at 59.5, close to the upper neutral limit 70.

September quarterly earnings released by 37 listed firms so far showed a growth of 375.3 percent year-on-year and another 202 firms are yet to post their quarterly earnings.

On Monday, foreign investors were net sellers of 222.1 million rupees worth’ of shares and they have sold a net 26.4 billion rupees’ worth so far in 2010. Turnover was 1.4 billion rupees ($12.3 million), its lowest since Aug. 16 and below this year’s daily average of 2.4 billion.

Meanwhile the rupee barely edged up at 111.68/70 a dollar from Friday’s close of 111.69/70 on importer dollar demand.