HNB draws top foreign fund

Thursday, 12 May 2011 00:38 - - {{hitsCtrl.values.hits}}

HNB yesterday saw foreign buying helping a net inflow in the Colombo bourse which otherwise remained negative.

A foreign fund, believed to be one of the top frontier markets players, had picked up around 1 million shares for Rs. 220 whilst in total 1.1 million of HNB shares traded for Rs. 243 million.

Deals on HNB made the highest contribution to turnover of CSE yesterday. Despite the deal HNB share price dropped by Rs. 3.00 (1.35%) and closed at Rs. 219. Analysts said foreign buying returned to HNB perhaps after it abandoned the private placement planned originally to give existing shareholders a higher allocation in its Rs. 14.3 billion fund raising exercise to boost capital and finance the strong lending pipeline.

“Foreign investors who may have been keen to participate in the private placement are now likely to pickup quantities to qualify for the 1 for 5 rights,” analysts added.

Apart from deals on HNB and rise of illiquid stocks, the market remained lackluster. ASPI was down by 0.8% and MPI by 0.2% after failing to capitalise on early morning gains. Turnover was Rs. 1.7 billion, higher than the previous two days.

“The indices dipped sharply due to selling pressure with activity stimulated by foreign participation which centered on banking counters,” John Keells Stock Brokers said. Net foreign inflow was Rs. 101 million, reversing Tuesday’s net outflow.

“Both indices continued to drop for the third consecutive day. The MPI managed to turn green as the day progressed, but did not sustain the increase. Turnover levels and volumes continued to remain unimpressive,” NDB Stockbrokers said.

Asian Hotels which announced share sub division gained by Rs. 8 whilst Trans Asia dipped by Rs. 12.80 despite its move.

John Keells share price up on subdivision move

JOHN KEELLS Plc yesterday saw its stock price gain by 8.7% or Rs. 17.60 to close at Rs. 219 following the announcement of share sub division.

Post sub division the number of shares in issue will increase to 60.8 million from the present 30.4 million. The move is subject to shareholder approval.

The sub division move by John Keells Plc is the latest within the Group following hot on the heels of similar moves in the same manner or in different proportions announced by Union Assurance, Ceylon Cold Stores, Asian Hotels and Trans Asia Hotels.

The slew of announcements sparked rumours that more similar moves and/or major news could be in the offing whilst others said JKH was only endeavouring to boost liquidity of some of its Group companies.