Bourse bounces back on foreign buying

Tuesday, 3 June 2014 01:24 - - {{hitsCtrl.values.hits}}

REUTERS: Stocks bounced back on Monday from their lowest close in over three weeks hit in the previous session, on buying by foreign investors and expectation that interest rates would come down further, stockbrokers said. The main stock index ended firmer 0.46%, or 28.95 points, at 6,292.41. It had closed at its lowest since 7 May on Friday. “Foreign buying boosted the sentiment, while local funds were buying on the lower interest rate outlook,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers. The bourse saw a net foreign inflow of Rs. 386.1 million ($ 2.96 million) worth of shares, extending the year-to-date net foreign inflow to Rs. 2.64 billion.Analysts said the market expects further fall in interest rates after Central Bank Governor Ajith Nivard Cabraal told Reuters on Friday that the Central Bank is creating room to cut interest rates further.

Secondary market bond yields continue to trickle down further

By Wealth Trust Securities Secondary bond markets remained bullish as yields were seen dipping further yesterday amidst considerable volumes changing hands, driven by the outcome of inflation for the month of May and future expectation of it as well. The liquid two 2018 maturities (i.e. 01.04.18 & 15.08.18) and the two 2019 maturities (i.e. 01.07.2019 and 01.11.2019) were seen hitting intraday lows of 8.38%, 8.44%, 8.88% and 8.91% respectively against its previous day’s closings of 8.41/42, 8.50/51, 8.94/95 and 8.95/98. In addition, activity was witnessed on the two 2016 maturities (i.e. 01.04.2016 and 01.09.2016), the two 2017 maturities (i.e. 01.03.2017 and 15.05.2017) and the 01.07.2022 maturity within ranges of 7.28% to 7.33%, 7.45% to 7.47%, 7.93% to 7.95%, 7.95% to 7.98% and 9.89% to 9.92% respectively. Furthermore the shorter tenor maturity of 01.11.2015 was seen dipping as well to be quoted at levels of 7.12% to 7.18% while in secondary bill markets, February and May 2015 bills were quoted at levels of 6.80/81 and 6.93/6.97 respectively. Meanwhile in money markets, overnight call money and repo rates averaged 6.95% and 6.50% respectively as surplus liquidity in the money market stood at Rs. 18.58 billion yesterday. The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 7.32 billion on a four day basis at a WAvg of 6.61% while a further amount of Rs. 11.25 billion was deposited at its Standing Deposit Rate (SDR) of 6.50%. Rupee remains stable Meanwhile in Forex markets yesterday, the USD/LKR rate remained mostly unchanged to close the day at Rs. 130.35/38. The total USD/LKR traded volume for the previous day (30 May) stood at $ 104.25 million. Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.82, 3 Months: Rs. 131.62 and 6 Months: Rs. 132.82.

Cabraal signalled “a lot a space being created for some more dovish action”. Monday’s turnover was Rs. 781.9 million, lower than this year’s daily average of Rs. 1.01 billion. Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows in May for the fourth straight month, as expected. Shares of conglomerate John Keells Holdings PLC rose 0.43% to Rs. 235, while Carson Cumberbatch surged 5.51% to Rs. 400. E-Channelling PLC, which accounted for about 38.5% of the day’s turnover, gained 1.45% to Rs. 14. The company said in a disclosure to the exchange that Senior Marketing Systems Asia Ltd., Singapore bought 21.4 million ordinary shares, or 17.5% of the voting ordinary shares in issue, and increased its shareholding in the firm to 47.4%.

Adam Investments IPO fully subscribed

Adam Investments Ltd. (AINV), Initial Public Offer was fully subscribed as at 4:30 p.m. on 30 May, an announcement posted on the Colombo Stock Exchange (www.cse. lk) website revealed and the issue closed on the same day. A letter from PW Corporate Secretarial Ltd., the registrars to the issue, sent to the CSE stated that the Initial Public Offer, which offered 133,333,500 ordinary voting shares at Rs. 3 per share for public subscription for a total consideration of Rs. 400,000,500, was fully subscribed as at 4:30 p.m. on 30 May. The basis of allotment, as per the formula stated in the prospectus to the issue is shown in the table. Adam Investments is approved to list 449,993,700 shares on the Diri Savi Board of the Colombo Stock Exchange, upon completion of allotment of shares of the IPO. Adam Investments Ltd. Executive Director/CEO Larry Adams obviously satisfied with the outcome, wished to express his thanks to the brokers, bankers, officials of CSE, SEC, Managers and Financial Advisors to the Issue, Capital Trust Financial Ltd. and Registrars to the Issue, PW Corporate Secretarial Ltd. “Above all, I wish to thank the members of the public who subscribed to make this issue a success. It is their confident participation that permitted Adam Investments Ltd., to gain full subscription of its shares almost a week ahead of the issue’s scheduled closing date of 5 June. On behalf of the Board of Directors of Adam Investments Ltd., I thank you all,” he added.