Battered by two consecutive years of negative growth, the Colombo stock market began 2013 yesterday on a positive note, with price indices up and turnover crossing the Rs. 1 billion mark thanks to a large foreign-to-foreign deal on Commercial Bank.
The All Share Index rose by 40 points or 0.72%, whilst the S&P SL 20 Index, which replaced the MPI from yesterday, inched up by over five points. Volume of shares traded was relatively high at 45.5 million, whilst turnover was Rs. 1.67 billion. Foreign participation was 85% of turnover, whilst a marginal net outflow of Rs. 17.2 million was recorded.
Biggest private sector bank, Commercial Bank, saw 14 million of its shares traded between two foreign funds, generating Rs. 1.4 billion turnover. The stock was subject to four crossings involving 13.45 million shares at Rs. 103.50 each. Janus was the seller.
As at end September 2012, Janus held 48 million shares or a 6% stake in Commercial Bank. However, it has been on the selling side in recent months to book profit or reallocate its Sri Lanka portfolio, which also includes a stake in premier blue chip JKH.
Yesterday’s sale was the biggest block to be divested of Commercial Bank shares. The buyer is a seasoned and popular foreign fund showing renewed confidence in Lankan equities.
The broking and investor community, reeling due to the 7% and 8.5% dip in 2012 and 2011 respectively, were elated by the positive start in the New Year.
Most brokers described the Bourse’s opening in 2013 as positive and optimistic.
“The Bourse commenced the year on an optimistic note with both indices witnessing gains,” NDB Stockbrokers said.
“The Colombo Bourse opened 2013 on a positive note backed by a further decline in Treasury bill rates and relaxation of forward forex deals,” added SC Securities.
New World Securities welcomed the positive start for the year, saying it augured well going forward, given the improved macroeconomic outlook.
“Institutional activity for the day remained relatively low despite the confidence displayed by the Central Bank Governor with respect to the growth prospects for the economy in his ‘Roadmap 2013’ presentation,” added Asia Wealth Management.
Softlogic Stockbrokers also said: “Colombo Bourse kicked off the new year on a positive note, extending gains for the fifth straight session.”
It said the benchmark index initiated the first trading day of 2013 in the green, yet glided down towards mid-day to touch a low of 5,632.9 (down 10 points). However, it followed a gradual movement upwards to close at 5,683.8 points, denoting a 41 point advance. However, the S&P SL20 index secured only a marginal 5.6 point gain at its close of 3,090.9 points.
NDB Capital Holdings, Finlays Colombo, Lion Brewery, Vallibel One, and Commercial Bank weighed on the ASPI positively. The turnover recorded was the highest since 18 December 2012, amidst large off-board deals in Commercial Bank of Ceylon.
Renewed retail and high net worth interest was highlighted in finance sector companies Nation Lanka Finance (+13.3%), Asia Asset Finance (+3.5%), and Central Investment & Finance Company (+13.6%), as each registered large on-board deals during the day’s trading.
Retail play was also witnessed in penny stocks HVA Foods, Free Lanka Capital Holdings, Tess Agro, and Nawaloka Hospitals. Buying interest was visible in banking sector counters National Development Bank and Nations Trust Bank as each advanced 1.1% and 1.9% at their close of Rs. 139.4 and Rs. 57.0 respectively.