Net inflow to Bourse tops Rs. 8 b mark as foreigners focus on COMBank

Tuesday, 23 April 2013 00:00 - - {{hitsCtrl.values.hits}}

Net foreign inflow to the Colombo Bourse has surpassed the Rs. 8 billion mark with the past two market days seeing overseas institutional funds investing over Rs. 800 million on blue chip Commercial Bank.

Foreigners accounted for net buying of Rs. 391 million yesterday on top of Rs. 491 million on Friday. The inflows pushed the year-to-date figure to Rs. 8.4 billion by yesterday.

Brokers said Commercial Bank shares were subject to heavy institutional foreign buying by existing funds both on Friday and yesterday. Last week overall Commercial Bank saw Rs. 551 million in net buying by foreigners, followed by HNB shares worth Rs. 405 million and Pan Asia Bank worth Rs. 250 million.

The burgeoning net foreign inflows have solidified the attractiveness of the Colombo stock market on valuations even though the bulk of the locals continue to remain inactive.

The Rs. 8 billion plus net inflow is on the back of the record Rs. 39 billion enjoyed last year whilst the market was down by 8.5% in 2012. This year so far the market is up 4% though the benchmark ASI dipped for the second consecutive day yesterday.

NDB Stockbrokers said the ASPI fell for the second session in a row while posting healthy turnover levels. “Foreign interest in Commercial Bank continued to drive market activity while Brown & Company also saw a parcel trade. Heavy activity continued in Colombo Land and Development while Agstar Fertilizer saw some activity with price volatility. Additionally, retail activity in counters such as HVA Foods and Citrus Leisure was also seen,” it added.

Softlogic Stockbrokers said: “The Colombo Bourse was trading on mixed sentiments, near a resistance area at 5,900. The benchmark index has been clustering near this area for the last few days on indecision. The ASPI lost marginally by 10 points.”

“Gains denoted on Colombo Land and Development (6.9%), National Development Bank (2.0%) and losses on Finlay Colombo (-10.0%), Selinsing (-7.7%) led the indecision tone on the benchmark index,” it added.

Softlogic said investor interest was further evident on Colombo Land and Development Company with notable onboard activity. The counter denoted several large onboard transactions, the largest being 50,000 shares which was dealt at Rs. 43.4. The counter further extended its rally with an intra-day high of Rs. 43.60 before closing at Rs. 43.40 with a gain of 7.0%.

Retail activity was also seen on HVA Foods (+6.8%), Citrus Leisure (+6.0%) and Kalpitiya Beach Resort (+15.1%), according to Softlogic Stockbrokers.

Asia Wealth Management said high-net worth participation was seen on Agstar Fertilizers where a transaction nearing four million shares pushed the counter to record the highest volume for the day.