Stock market tops 5% return already; Market cap swells by Rs. 120 b

Wednesday, 12 January 2011 00:15 - - {{hitsCtrl.values.hits}}

The Colombo stock market has already produced an over 5% return year to date reinforcing its attractiveness over ordinary savings products.

Thanks to sustained buying on strengthening investor sentiments, the benchmark ASPI gained by over 1%, better than Monday’s 0.3%. This saw the year to date gain of ASPI top 5% to close with 5.38%. The value of the Colombo market also crossed the Rs. 100 billion mark yesterday with the year to date increase amounting to Rs. 120 billion. As of end Monday, the rise in market capitalisation was only Rs. 95 billion.

John Keells Stock Brokers said the indices rose sharply on sustained local retail participation amid healthy turnover levels while interest on Laugfs remained solid.

NDB Stockbrokers said indices gained as Central Bank reduced policy rates by 25 and 50 basis points respectively. This is in contrast to other emerging markets which are raising rates in view of inflation, it added.

Power & Energy and Hotels & Travels sectors were the highest contributors to the market turnover while both indices increased by 9.10% and 2.16% respectively.

The illiquid Watapota topped the list of gainers percentagewise with a hefty 180% or Rs. 1,440 to close at Rs. 2,240 on account of its planned Rs. 250 million investment in Expo Lanka Holdings and Rs. 503 million fund raising exercise via a 75 for two Rights Issue at Rs. 20 each.

For the second consecutive day Laugfs Gas made the highest contribution (Rs. 706 million) to the market turnover with 15.2 million shares traded including a crossing of 401,000 shares at Rs. 49.90 while the share price increased by Rs. 6.80 (16.19%) and closed at Rs. 48.20.

Citrus Leisure (Hotel Reefcomber) also contributed Rs. 366.5 million to the market turnover with 4.2 million shares changing hands including four crossings of 1,940,840 shares at Rs. 86. The share price increased by Rs. 4.80 (5.63%) and closed at Rs. 90.

Seven other crossings were also recorded for 1,078,500 shares of Ceylon Grain Elevators at Rs. 120; 200,000 shares of John Keells Holdings at Rs. 295; 100,000 shares of Hayleys at Rs. 350 and 250,000 shares of DFCC Bank at Rs. 202.

Reuters in its report said the bourse pushed deeper into overbought territory on Tuesday in heavy retail buying.

It said the bourse is trading at a forward price-to-earnings (P/E) ratio of 17.9, the highest among emerging markets, compared with 13.1 in Asian markets and 12.3 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 80.6 beyond the overbought limit of 70.

LB Finance to capitalise Rs. 346.2 m

LB Finance Plc yesterday announced a resolution by its Board to capitalise Rs. 346.28 million worth of reserves via the issuance of one for one fully paid shares at Rs. 10 each.

Its current stated capital is Rs. 491.9 million and the number of shares to be issued is 34.628571 million worth Rs. 346.28 million. Revenue reserves will be capitalised.

The move is subject to regulatory and shareholder approval.

Despite the capitalisation move being announced after the market was closed, LB Finance share price yesterday gained by Rs. 14.40 to close at Rs. 309.40 whilst it touched a high of Rs. 314 earlier on.