Foreign net inflow tops Rs. 3 billion

Tuesday, 28 February 2012 01:25 - - {{hitsCtrl.values.hits}}

Locals may be having fears of the Geneva outcome but the very investors from the West are continuing to be bullish with net inflow topping the Rs. 3 billion mark by yesterday.

Foreigners were net buyers to the tune of Rs. 224 million increasing the net inflow under just two months of the year to Rs. 3.16 billion. Though small it is a record high and significant since for three years beginning 2009, the Colombo Bourse has seen a consecutive outflow.

Among stocks favoured by foreign funds yesterday were Ceylon Tobacco (Rs. 63 million), Sampath Bank (Rs. 61 million), Aitken Spence Hotels (Rs. 52 million) and Royal Ceramics (Rs. 16 million) whilst there was also buying in to JKH and Chevron Lubricants.

As part of trading Captains were largely on the selling side of Sampath as well as Commercial Bank whilst state funds EPF and ETF were active yesterday as well collecting banking and other blue chips.

Sampath, CTC, Aitken Spence Hotel Holdings and Royal Ceramics figured among the top five turnover contributors.

Analysts said average local investors were either selling out or on the sidelines awaiting the developments of the Human Rights Council sessions on Sri Lanka at the United Nations in Geneva whilst others blamed the inaction to problems associated with the Automated Trading System (ATS) version seven, as well as profit taking.

Ending 11 successive positive sessions, the stock market dipped by 1.6% yesterday whilst turnover was Rs. 616 million.

“The fall is due to profit-taking, but a number of investors have complained they can’t access the system via the internet after the stock exchange upgraded its trading system,” Acuity Stockbrokers Prashan Fernando was quoted as saying by Reuters.

Arrenga Capital said the bourse lost steam after seven consecutive days of gains with the approach of the month end margin calls and profit taking by investors.

The benchmark index had jumped over 550 points during the past seven days. The selling pressure during the day led to a decline in activity levels while the turnover was boosted by 3 off-market deals in blue-chip counters.

“In line with our expectations the sharp gains in the past week built up selling pressure with some investors looking to take profit. We believe the bourse is likely to continue to decline in next couple of days bringing back selected counters to attractive prices. Thus, we advise our investors accumulate on a decline market as we believe that at 5,200 level market valuations seem in line with peer markets,” Arrenga said.

Bukit Darah, Selinsing and Ceylon Beverage Holdings were the largest contributors to the decline of the index, which some linked to anomalies of ATS Version 7.