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Thursday Dec 12, 2024
Thursday, 16 August 2012 01:15 - - {{hitsCtrl.values.hits}}
Seemingly ignoring the doom and gloom cast by some circles over the pending ‘regulatory change,’ the Colombo stock market yesterday saw the rebound sparked on Tuesday getting stronger, with net foreign inflows topping the Rs. 27 billion mark and turnover surpassing Rs. 1 billion.
The rally as reported by the Daily FT yesterday continued with focus on blue chips, with premier corporate John Keells Holdings (JKH) leading the way as foreigners were willing to collect quantities even paying a premium.
Deals on 3.5 million JKH shares worth Rs. 710 million boosted the market’s turnover to Rs. 1.03 billion, the highest in several weeks. Among shares traded was a crossing of 2.65 million shares at Rs. 200 each in addition to another parcel of 138,700 shares done at the same price on-board. JKH closed at Rs. 199, up by 1.95% from Tuesday and 7.5% this week.
Largely on JKH, net foreign inflow swelled to Rs. 586.4 million yesterday, thereby surpassing the year-to-date figure to Rs. 27.1 billion according to Softlogic Stockbrokers.
Overall improved sentiments saw the ASI and MPI gain sharply by double digits points wise.
Whilst JKH lent near 10% support to the ASI’s gain, Commercial Bank (up 1.17%) joined the league of key contributors for the second consecutive day with a near 4% contribution, followed by Cargills (up 4.43%), Hayleys (+5.23%) and Hatton National Bank (+5.58%). DFCC was active as well with a crossing of 263,736 shares at Rs. 117 each whilst the stock closed at Rs. 112, up by Rs. 3.10. The market saw its value rise by Rs. 12 billion, though lower in comparison to Monday’s gain of Rs. 23 billion.
SEC Chairman Tilak Karunanaratne has announced his resignation, likely to be today, in frustration over lack of independence and this move has prompted some to warn that the market will dip in tandem with loss of investor confidence. Another segment of the market views the change as positive as it will usher pragmatic regulation as opposed to overregulation. In that context, it will be interesting to see whether the mini-rally since Tuesday will gather momentum or not.
Some pinned the rebound on improved investor sentiments whilst others linked it on foreigners continuing to collect stocks with attractive valuation, a hard fact which most locals have ignored.Nevertheless, two days of gain has brought the ASI’s negative return year-to-date to the below 20% mark.
Asia Wealth Management described the upturn as “unexpected” but partly attributed it “changes expected in the SEC hierarchy” and largely to a number of large trades on premier blue chip JKH.
