Extended X’mas as Bourse climbs to 7-week high

The Colombo bourse appears to be enjoying extended Christmas as it rose to seven week high yesterday with improved investor sentiments.

Benchmark ASPI gained by over 63 points or near 1% to close at 6,621.51, its highest since 8 November. In the last five sessions, it has gained 4.1%.

“The indices registered further gains on local retail buying interest evident across most sectors amid low activity levels,” John Keells Stock Brokers said.

“Retail participation was prominent during today’s trading, while renewed interest on the plantation segment was evident,” noted Asia Securities.

“Retail investors continued to accumulate while profit taking was also witnessed in certain counters. However the overall buying interest kept the indices up. Prevailing positive momentum may sustain this week,” NDB Stockbrokers said.

Gain yesterday however was on a turnover of Rs. 1.1 billion largely boosted by local play. Best Performing Sector was Plantations (+4.24%) whilst the worst was Stores & Supplies (-2.10%).

Investment Trusts and Diversified sectors were the highest contributors to the market turnover while sector indices increased by 2.69% and 1.14% respectively.

Renuka Holdings made the highest contribution to the market turnover with a crossing of 2,500,000 shares (amounting to around 5% stake) at Rs. 60.50 while the share price increased by Rs. 0.60 (0.97%) and closed at Rs. 61.60.

Premier conglomerate John Keells Holdings also contributed to the market turnover while the share price increased by Rs. 0.50 (0.17%) and closed at Rs. 304.

Another crossing was recorded for 115,000 shares of CT Holdings at Rs. 184. Richard Peries also saw trades worth Rs. 54.5 million along with Kotagala Plantations (Rs. 31 million) and Hatton National Bank(Non Voting) amounting to Rs. 31 million.

Asia said JKH saw high net worth and retail participation, whilst heavy retail buying was witnessed on Richard Peries and Kotagala Plantation with the counters edging up 1.9% and 8.7% respectively. HNB non voting witnessed high net worth interest.

Colombo’s year to date gain yesterday moved to 95.6% reinforcing its status as Asia’s best performer, with Indonesia that rose a 43% becoming a distant second.

A liquidity shortage has hit the Sri Lankan bourse which has fallen 8.1 percent from its record high hit on 4 October.

Year-end settlements and the impending holidays are other factors that are slowing down the trading.

Monday’s turnover was 1.1 billion rupees ($10 million) — around two times the 2009 daily average of 593.6 million rupees. Foreign investors have sold a net 25.9 billion rupees in shares this year, and on Monday, they sold a net 18.7 million rupees.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.5, the highest among emerging markets globally.

In comparison, average P/E of Asian emerging markets is 13.1 and that of global emerging markets is 12.2, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 62.6, towards the upper neutral limit of 70.

On Monday, as many as 44.4 million shares changed hands, as against five-and 30-day average of 30.4 million and 49.4 million, respectively. The 90-day average volume is 62.9 million.

The Sri Lanka’s rupee rose to 111.05/08 a dollar from Friday’s 111.15/20 on dollar sales by exporters, dealers said. In 2010, the local unit has risen 2.95 percent.