Bourse consolidates as net foreign inflow tops Rs. 12 b

The Colombo stock market yesterday consolidated itself with ASI marginally down and blue chip S&P SL20 Index up whilst foreign buying remained robust with net inflow topping the Rs. 12 billion mark.

“Reversing Monday’s gains, the ASPI lost 0.4% as investors took profit from the market’s ascent over the last week. Turnover jumped to Rs. 2.2 billion with trading in Commercial Bank, John Keells Holdings and Distilleries accounting for 60% of the week’s total,” DNH Financial said.

“The Bourse moved on a consolidation path today as the benchmark index took a steep downturn after a 19 point gain at its peak during mid-day to an intra-day low of 6,423.04 points (-43 points). However it closed with a lesser dip of 25 points,” Softlogic Stockbrokers said.

The latter was due to losses in Nestle Lanka, NDB Capital Holdings and Sri Lanka Telecom outweighing gains in Ceylon Tobacco Company, Commercial Bank and Dialog Axiata.



Retail favourite Environmental Resources was down by 6.3%.

In contrast the S&P SL20 index which saw a number of shares trading at their 52-week high levels secured a gain of 11 points extending its YTD gain to 18.7%.

“Market turnover crossed the Rs. 2 billion mark on the back of a number of block trades on counters such as Commercial Bank, John Keells Holdings and Distilleries. High net worth and foreigners remained active during the day while the latter contributed to nearly 45% of the turnover,” NDB Stockbrokers said.

According to Softlogic the market saw 15 crossings encompassing S&P SL20 calibre counters, which took up 48% of turnover.

Commercial Bank continued its rally gaining 2.6% as it registered eight crossings carrying 4.2 million shares at Rs. 125 while on-board activity in the counter remained strong amidst its price renewing its 52-week high at Rs. 126. Overall Commercial Bank saw 5.65 million of its shares traded for Rs. 705.7 million.

Foreign interest remained uninterrupted with the day recording a net foreign inflow of Rs. 1.1 billion carrying the YTD net foreign inflow to the Rs. 12.4 billion mark, Softlogic said.

Investor hunt on John Keells Holdings continued with the counter renewing its all-time high at Rs. 299.8. Selling pressure that emerged led the counter to close with a marginal dip at Rs. 297.

NDBS also said the share price of Distilleries Company increased Rs. 0.50 (0.26%) to close at Rs. 190 while the share price of Cargills Ceylon edged up Rs. 2.50 (1.45%) to close at Rs. 175. The share price of Royal Ceramics fell by Rs. 1.20 (1.10%) to close at Rs. 107.50. Foreign holding of Distilleries Company and Cargills Ceylon increased by 730,000 and 552,456 shares respectively.

BFI sector play persisted with greater focus on Commercial Bank Voting & Non-Voting and Nations Trust Bank which traded at 52-week high levels of Rs. 126, Rs. 102 and Rs. 68.9 respectively, according to Softlogic.

Retail activity picked up with the recent bullish sentiment prevailing in the Bourse. Majority of focus surrounded Amana Takaful, Overseas Realty, Central Investment and Finance and Colombo Fort Land and Building, it added.

DNH Financial said it viewed yesterday’s profit taking as healthy given that the market had risen by 203 points over the past week.

“We also view the price weakness as an opportunity for fundamentally focused investors to select a basket of stocks that will outperform over the medium to longer term. We advise investors to maintain a healthy investment horizon focusing on high quality cash rich companies with strong balance sheets that have underperformed during periods of market over-exuberance and which have the upside potential to re-rate to their intrinsic values. In terms of market trajectory, we expect the Bourse to test the 6,500 key resistance level over the next few days although intermittent bouts of profit taking could result in temporary dislocations,” DNH Financial added.