Bourse turns bullish after 3-day bear run

The Colombo stock market saw a welcome rebound yesterday after being beset by a bear run in the past three days.

The All Share Index gained by 39 points and MPI by 74 points with turnover was a healthy Rs. 943 million.

The rebound since Friday is welcome considering the fact over Rs. 100 billion in value had been lost despite the SEC implementing three directives beneficial to the market. However, analysts said profit taking was understandable after the market had risen sharply between late August and early October.

The low turnover of Rs. 372 million on Wednesday was seen as an indicator that selling pressure prevalent previously had eased off. Consequently fresh round of buying was envisaged and the exact thing took place yesterday.

A development that remains emphatic is the persistent foreign buying, which resulted in a net inflow of over Rs. 200 million yesterday too.

NDB Stockbrokers said fundamentally-sound counters such as John Keells Holdings, Chevron, Distilleries and Commercial Bank contributed to the turnover. Institutional and high net worth investor participation was seen in John Keells Holdings, Chevron and Hunas Falls Hotels. Retail activity remained low with counters such as Nation Lanka Finance and Asiri Hospitals gaining interest.

“The Bourse took a break from the bear run as all three indices turned green after three days of consecutive losses of +150 points, with fresh buying notably in steady counters,” Softlogic Stockbrokers said.

All three indices trended upwards and remained in the green during most of the trading hours albeit some intraday volatility, it added.

Sri Lanka Telecom (+3.3%), Aitken Spence (+2.3%), Nestle Lanka (+1.7%), Asian Hotels & Properties (+2.8%) and Commercial Bank (+1.2%) weighed on the broader index positively as it closed with a 38.9 point advance. The liquid MPI overrode the ASPI as it peaked at 5,148.0 (+93 points) before settling at 5,129.9 points. Sturdy gains were registered in Free Lanka Capital Holdings (+3.9%), Lanka Hospital Corporation (+4.7%), Nations Lanka Finance (+6.5%) and Nations Trust Bank (+3.5%) representing the MPI calibre.

Softlogic said high net worth and institutions proved to be active with the amount of on board heavy trades which drew the top turnover slot. Retailers too were notable with play in Lanka Hospital Corporation, Nations Lanka Finance and East West Properties.

“But the overall tone of the market, the investors are yet on a ‘wait-and-see’ mode despite the emergence of some buying on the selected lot,” Softlogic opined.

Yesterday heavyweight, John Keells Holdings, emerged strong as the blue chip infused some life to the otherwise subdued turnover levels as two large off market deals carrying around 900,300 shares in the counter at its close of Rs. 205.0 constituted around 30% of the day’s turnover.

It closed in the green with a marginal 0.5% gain at Rs. 203.9. Renewed investor play was witnessed in Hunas Falls Hotels as the counter saw a block of 899,000 shares (around 15% stake) being crossed off at Rs. 65.

Considerable investor participation was evident in Chevron Lubricants as the counter saw a parcel of 100,000 shares being taken on board at Rs. 195. The counter advanced 2% at its close of Rs. 195. Interest extended in both Distilleries and Colombo Dockyard, as each witnessed a large on-board deal of 216,000 and 130,000 shares at Rs. 141 and Rs. 223 respectively.

Among the banking sector, Commercial Bank (+1.2%), National Development Bank (+2.3%) and Sampath Bank (+1.3%) retained buying interest as the former saw several large deals being handled in the market. High Dividend plays, Nestle Lanka and Ceylon Tobacco both attracted interest as each appreciated 1.7% and 0.3% respectively.

Further renewed play was evident in plantation sector counter Namunukula Plantations as the counter saw several large trades on board including a 136,800 share parcel being dealt at Rs. 80 each.  The counter closed flat at Rs. 80. Interest continued in Asiri Hospital Holdings as a block of 899,000 shares was seen taken on board.

Retail activity prominently evolved around Lanka Hospitals Corporation, Citrus Leisure, Free Lanka Capital Holdings, Touchwood and HVA Foods.