Bourse dips as foreigners take a breather, locals wait

Friday, 17 August 2012 00:01 - - {{hitsCtrl.values.hits}}

Amidst suspense at the SEC, the Colombo stock market ended its two-day rally yesterday, a development which brokers linked to “foreigners taking a breather” as well as profit taking and a correction in prices in the backdrop of lacklustre activity.

The ASI dropped by 30.94 points (-0.63%) to close at 4,908.72, MPI lost 58.83 points (-1.28%) to close at 4,521.32 and the S&P index dropped 20.90 points (-0.75%) to close at 2,778.88. Turnover was Rs. 209 m.

NDB Stockbrokers’ daily market report, headlined ‘Foreigners take a breather,’ said the Bourse witnessed reduced activity levels and lost ground after gaining in the first three days of the week.

“Profit taking was seen in index heavy john Keells Holdings, hence the counter dipped around 2%. Distilleries witnessed renewed interest whilst accumulation was seen in Seylan Bank,” it added.

Lanka Securities said: “The market saw a correction as recent hot picks such as John Keells Holdings, Commercial Bank and Sampath Bank saw their share prices dropping. Turnover levels fell as activity on the above-mentioned stocks witnessed little activity. Retail investors also remained on the sidelines,” it added.

“Investors are just holding to see what is really going to happen in the SEC and who is going to be the new head,” Reuters said in its report, quoting an analyst who didn’t wanted to named.

Increasing interest rates continue to haunt the Bourse as it lacks buying power, noted Softlogic Stockbrokers after Wednesday’s T-Bill auction resulted in a five bp gain in the 12-month yield rates to 13.23%.

Despite being relatively inactive, there was a foreign net inflow of Rs. 26 million with participation being 20% of market turnover.

Top contributors to turnover were John Keells Holdings with Rs. 46.4 million, Panasian Power with Rs. 21.3 million and Seylan Bank non-voting with Rs. 12.9 million. Most active counters for the day were Commercial Credit which announced a Rs. 1 dividend, Swarnamahal Financial Services and HVA Foods.

Notable gainers for the day were Harischandra Mills up by 13.9% to close at Rs. 2,899, Kelsey Homes up by 7.6% to close at Rs. 15.60 and Asian Alliance Insurance up by 3.6% to close at Rs. 84. Notable losers for the day were SMB Leasing down by 10% to close at Rs. 0.90, Tess Agro down by 4.4% to close at Rs. 2.20 and Hemas Holdings down by 3.9% to close at Rs. 22.10.

The Diversified sector became the highest contributor to the market turnover (due to John Keells Holdings) and the sector index lost 0.97%. The share price of John Keells Holdings decreased by Rs. 4 (2.01%), to close at Rs. 195.

The Bank, Finance and Insurance sector emerged as the second highest contributor to the market turnover (due to Seylan Bank non-voting) and the sector index came down by 0.75%. The share price of Seylan Bank Nonvoting slid Rs. 0.50 (1.89%) to close at Rs. 26.

The rupee ended a tad weaker at 131.95/132.00 against the dollar from Wednesday’s close of 131.95/97 on importer dollar demand, dealers said.