Net foreign inflow to CSE tops Rs. 10 b mark

The year-to-date net foreign inflow to listed equities crossed the Rs. 10 billion mark yesterday, reinforcing the attractiveness of select opportunities at the Colombo Bourse.

The milestone was achieved when owing to foreign buying of Rs. 1.08 billion with sales being Rs. 229 million, resulting in a net inflow of Rs. 860 million.

According to Softlogic Stockbrokers, year-to-date net foreign inflow as of yesterday was Rs. 10.6 billion. Foreign buying was heavy on JKH, NDB and United Motors.

The continued robust net inflows on the back of a record Rs. 39 billion netted last year has been outstanding for the Colombo Bourse, apart from boosting overall local investor sentiments in spite of many still remaining inactive.

The Colombo Bourse returned to positive territory yesterday on the strength of foreign interest as well as locals chipping in following a fresh round of heavy profit taking seen in the previous two days.

Thanks to gains by 110 counters (while NEST positively contributed by four points), the ASI was up 14 points helping its year-to-date return to be above 10% whilst S&P SL 20 Index dipped by two points though its year-to-date remains at 13.4%.

NDB Stockbrokers said the broader market continued to move up with interest primarily seen in blue chips and foreign buying dominated market activity with a contribution of 64%.

“Profit taking was seen in banking sector with lower profitability reported for FY12Q1 while motor sector companies such as United Motors and Colonial Motors also drew significant interest,” it added.

The Banking, Finance & Insurance sector was the top contributor to the market turnover (due to National Development Bank) and the sector index decreased by 0.37%. The share price of National Development Bank dropped Rs. 4.10 (2.29%) to close at Rs 174.90.

The Diversified sector became the second highest contributor to the turnover (due to John Keells Holdings) and the sector index gained by 0.44%. The share price of John Keells Holdings gained Rs 1.90 (0.70%) to close at Rs. 274.90.

Cargills Ceylon, United Motors and Piramal Glass were also among the top turnover contributors. The share price of Cargills Ceylon moved up Rs. 4.50 (2.82%) to close at Rs. 164. The share price of United Motors jumped Rs. 5.40 (5.02%) to close at Rs. 113. The share price of Piramal Glass increased Rs. 0.10 (1.47%) to close at Rs. 6.90.

Softlogic said the Bourse reverted back to the green on a volatile note with renewed buying interest.

Gains denoted in heavy weights Nestle Lanka (+1.8%), Carsons Cumberbatch (+1.4%), Hatton National Bank (+1.8%) and John Keells Holdings (+0.4%) supported the uptrend of the index while marginal dips in banking players in the S&P SL20 calibre led the index to close marginally down.

Softlogic said 15 crossings added 54% to the turnover spearheaded by JKH which saw seven off-board deals which carried 1.25 million shares at Rs. 274.0 and Rs. 275. The counter touched a new 52-week high of Rs. 275 with majority of on-board interest weighing towards the selling side.

“BFI sector interest continued highlighting Sampath Bank (-1.5%), National Development Bank (-2.3%) and Commercial Bank (-1.4%) creating further opportunity to accumulate,” Softlogic said, adding the former counters encountered one and four crossings each at Rs. 225 and Rs. 175.

Piramal Glass was noted in the top turnover slot with several large blocks being picked at its new 52-week high of Rs. 6.9. The counter offers attractive dividend yields of 5.7% and 6.1% on FY14E and FY15E net earnings whilst trading below the manufacturing sector trailing PER of 11.6, according to Softlogic.

LOLC Securities said there was interest on PCH while the price closed at Rs. 3.80 with a gain of 11.76%.

DNH Financial said while pockets of corporate results are trickling into the market, the majority was yet to be released.

“While we concede with the fact that most investors have largely been sitting in the wings over the last several months in anticipation of a market trigger that would propel the market to the next level, with the reporting season having just commenced, we advise investors to refrain from assuming any speculative positions but concentrate on carefully selecting counters that will benefit from the robust domestic consumption story and report sustainable earnings growth and healthy cash flows,” DNH added.