Net foreign inflow to Colombo Bourse tops Rs. 38 b mark

A burst of foreign buying at the Colombo stock market yesterday propelled the year-to-date net inflows to overtake the Rs. 38 billion mark.

As consistently highlighted by the Daily FT, including yesterday, foreign funds are aggressively buying into attractively-priced select Sri Lankan equities.

Yesterday’s purchases amounted to nearly Rs. 700 million, most of it on JKH, whilst sales were Rs. 164 million, resulting in a net inflow of Rs. 533 million. With over Rs. 350 million achieved in the first three days of the market, by yesterday the net inflow for the week amounted to Rs. 900 million.

The Rs. 38.1 billion year-to-date net inflow is an all-time record for the Bourse and more significant given the net outflow of Rs. 19 billion last year and Rs. 26 billion in the previous year.

Foreigners remaining bullish on Lankan equities and their future upside are also despite the 10% negative return at the Colombo Bourse, and ill-effects from doomsayers and sceptics. “Retail activity remained subdued with investors remaining in sidelines,” noted NDB Stockbrokers.

Brokers have opined that local investor sentiment should gather strength on account of continuous foreign buying as well as declining trend in interest rates.

Yesterday the ASI gained 14.70 points or 0.27%, the MPI gained 9.76 points or 0.19%, and the S&P SL20 index rose by 12.87 points or 0.43%. Turnover was Rs. 811.9 million.

“The Bourse moved on to the green territory amidst up-ticks in index heavy counters while activity levels remained dormant, dipping to a one-week low. Large trades dominated the market, with a contribution of 54% from crossings to the day’s turnover,” Softlogic Stockbrokers said.

Lanka Securities said top contributors to turnover were John Keells Holdings with Rs. 572.2 million, Aitken Spence with Rs. 67.2 million, and Commercial Bank with Rs. 49 million. Most active counters for the day were Nation Lanka Finance, Madulsima Plantations, and Central Finance and Investments, dominated by retailers.

Notable gainers for the day were Capital Alliance Finance up by 19.9% to close at Rs. 24.10, Madulsima Plantations up by 10.0% to close at Rs. 16.50, and United Motors up by 5.6% to close at Rs. 95. Notable losers for the day were Expo Lanka down by 2.9% to close at Rs. 6.80 and Regnis down by 2.4% to close at Rs. 58.00

Significant gains made in Ceylon Tobacco Company (+0.6%), John Keells Holdings (+0.5%) and Bukit Darah (+1.2%) assisted the benchmark ASI to gain.

“The week’s trend of strong high net worth and institutional participation, continued as several large blocks were transacted in fundamental counters,” Softlogic said.

JKH saw five large off-board blocks of around 1.7 million shares which changed hands at its peak of Rs. 218 while a 750,000 share block was picked on-board at the same price depicting strong buying interest.

Aitken Spence regained interest as it witnessed two on-board blocks totalling 568,000 shares at Rs. 117.60 after which its price appreciated to Rs. 119 (+1.3%) before closing at Rs. 117.6 (+0.1%). The final minute of trading saw 1.1 million shares of Tokyo Cement being crossed off at a 52-week low (off-board) price of Rs. 27.5 while its on-board proportion of trades were insignificant.

Commercial Bank and Bukit Darah continued to enjoy investor focus weighing heavier on the buying side. The former counter added 138,000 shares at Rs. 103 followed by a crossing at the same price totalling 306,000 shares. Its price slipped 0.2% at its close to Rs. 101.80. The latter closed with a gain of 1.2% at Rs. 662.0.

Chevron Lubricants and Namunukula Plantations renewed their 52-week high levels at Rs. 203 and Rs. 90, on very thin volumes, while Ceylon Tobacco Company edged up to the top turnover slot while it traded at its 52-week high of Rs. 800. Touchwood Investments, Softlogic Finance, CIC Holdings, and SMB Leasing continued to trade at their 52-week low price levels.

Softlogic said retail interest was minimal while some focus gathered around Amana Takaful (+0.0%), Nation Lanka Finance (+2.3%) and its [Warrant: 0021] (+5.3%).