Consistent Colombo

Reaffirming consistency the end of 2010 yesterday completed a milestone for Colombo Stock Exchange (CSE) as the world’s second best performing for the second year running.

Rupee appreciates by 3% in 2010

 Sri Lanka’s rupee ended flat at 110.94/96 a dollar in sluggish trade, currency dealers said. The Rupee rose by 3.06% in 2010.

Harry gets his Rs. 5.7 b due over SLIC

Business tycoon Harry Jayawardena controlled Distilleries Group has received Rs. 5.7 billion due from the Government over the takeover of Sri Lanka Insurance Corporation (SLIC).

The amount paid back by the Government was for the 510.17 million shares of SLIC bought by Distilleries subsidiary Milford Holdings Ltd.

Distilleries made the disclosure of receipt of payment in a filing to the Colombo Stock Exchange yesterday.

Incidentally Distilleries made the highest contribution of Rs. 86.3 million to the market turnover of Rs. 1.3 billion yesterday. However the share price closed unchanged at Rs. 177.90 whilst it peaked to an intra-day high of Rs. 185, still below its 52-week high of Rs. 195.

The Bourse ended the year with a 96% gain helped by a 0.3% rise yesterday.

The 2010 gain of 96% though down by 8% from October peak, is on top with 125% return offered in 2009.

Whilst Sri Lanka lost to Russia in 2009 for the slot as the world’s best performer, in 2010 the winner was Mongolia which produced a 138% growth.

From an Asian context Colombo remains undisputed leader for the two consecutive years. Asia’s second best performer Indonesia had grown by 46%.

NDB Stockbrokers described yesterday as “End of a flourishing year.”

It said retailers lifted the indices yesterday to end a prosperous year for equity. CSE created history by posting an average daily turnover above Rs.2 billion. ASPI and MPI recorded a double digit growth, gaining 96% and 83% respectively for the year, NDB Stockbrokers added.

Whilst overall 2010 performance was momentous much less of it was evident yesterday as confirmed by the 0.3% gain and below average Rs. 1.3 billion turnover. Some anticipated a much sharper gain yesterday being the year end. However now the focus is on the first trading of the New Year on Monday.

“Activity levels remained moderate during the day while the indices gained on active local retail and institutional participation,” John Keells Stock Brokers said.

Best performing sector on the last day of the year was Stores and Supplies (+4.42%) whilst the worst performing was Health Care (-1.34%).

Beverage, Food & Tobacco and Manufacturing sectors were the highest contributors to the market turnover while both indices increased by 0.42% and 1.39% respectively.



Reuters reported that the dip from October high was on year-end settlements, profit taking, and

liquidity shortage.

It said despite being expensive in valuation, retail investors and  government funds mainly boosted the market this year on hopes of  rapid economic expansion after the end of the 25-year war in May last year.

“We will not see a similar surge next year, but we will see high activities with over 60 firms in line for listing,” Reuters quoted Danushka Samarasinghe, director at TKS Securities as saying. “We expect 60 percent rise with better earnings in 2011.”

The year saw a net foreign outflow of 26.4 billion rupees from the bourse, more than twice of last year’s net selling of 11.4 billion rupees. On Friday, offshore investors sold a net Rs.15.9 million.

The daily average turnover for 2010 was at a record 2.4 billion rupees, more than four times higher than the previous all-time high of last year’s 593.6 million rupees. Friday’s turnover was Rs. 1.3 billion rupees ($11.8 million).

The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.5, the highest among emerging markets, compared with 13.1 of Asian markets and 12.1 of global emerging markets, Thomson Reuters StarMine data showed.

The CSE’s 14-day relative strength index is at 62, towards overbought or the upper neutral limit of 70. 

On Friday, 48 million shares changed hands, as against five-and 30-day average of 48.7 million and 54.1 million, respectively. The 90-day average volume is 63.7 million. In 2009, daily average volume was 19.8 million.