Investors gain more confidence as stock market gains

Friday, 2 December 2011 00:00 -     - {{hitsCtrl.values.hits}}

Investors appear to be gaining confidence as the Colombo stock market consolidated its recent gains on top of high turnover.

The benchmark All Share Index gained 57.27 points (+0.94%) to close at 6,144.67 while the more liquid Milanka Price Index increased by 30.18 points (+0.57%) to settle at 5,303.76.

Helped by the Rs. 1.3 billion deal of DFCC buying 10% stake in NTB, market’s turnover was Rs. 4.2 billion.

“The Colombo bourse revisited its glory days with a sturdy performance. All round investor participation continued to rise,” SC Securities said.

“The market stayed on green throughout the day while the speculative counters continued to dominate market activity,” NDB Stockbrokers added, whilst Lanka Securities noted: “Colombo equity market was surging today in the backdrop of positive investor sentiments regarding expected new rules.”

“Institutional and high net worth traders were quite active as large block trades were seen drawn up in the face of market swings,” Arrenga Capital added.

It said as institutional investors look to realign their portfolios in reaction to crisis-like market conditions, they seem to be flocking to the safety whilst making use of the deep shed in prices available in counters such as John Keells Holdings, which now trades after dipping 17% since its subdivision in June 2011.

“It is believed the activity levels were primarily triggered by institutions as they picked their spots but avoiding slicing up prices,” it added.

Heavy index John Keells Holdings continued to witness big block trades as a further 894.3 k shares at Rs. 170 was seen made in the counter. The counter which witnessed a single dip of 2.5% on Wednesday continued to see its price being eroded by an additional 0.1% at Rs. 169.9.

The Banking sector caught the eye on most trading terminals as large transactions were seen drawn up on Nations Trust Bank (a strategic stake change), Sampath Bank, Hatton National Bank [Non-Voting] and Commercial Bank.

Lanka Hospitals Plc shares rose 24.31% to Rs.58.30 contributing Rs.288.4 million and Entrust Securities Plc was the highest gainer for the day rising 66.43% to Rs.70.90 contributing Rs.228.7 million when the share began trading.

Swarnamahal Financials Plc, which saw a notable intraday rally, gained 25.39% to Rs.95.30 and saw the 10% price band being imposed by the Securities and Exchange Commission.

Arrenga said among the petite counters, Textured Jersey encountered a 4.6 million crossing taking place at Rs. 15 whilst Environmental Resources Investments witnessed two parcels carrying 1.5 million shares in total being crossed off at Rs. 55.50 and Rs. 56. Trade Finance & Investments Limited also saw a 1.5 million share deal being drawn up at Rs. 18.

Lanka Hospitals Corporation, a counter which had a dormant play in the recent speculative runs, re-emerged with active participation as it made a concrete 24.3% gain at its close of Rs. 58.3 after touching a high of Rs. 59.5.

Entrust Securities Limited, picked up pace after Wednesday’s sooth off of its initial run on Tuesday. The counter continued to gain a further 66.4% at its close of Rs. 70.9 as it ballooned up 254.5% from its initial reference price of Rs. 20.

Colombo Land & Developments along with HVA Foods, Dankotuwa Porcelain, Orient Garments, Ceylon Leather Products, PC House and East West Properties; continued with their heated race. Investors seem to be taking risky bets in the poultry players even after downgrading of analyst views on broiler operators’ performance.

The prices continued climbing up as Ceylon Grain Elevators gained 5.1% at its close of Rs. 110.2 (intra-day high of Rs. 113.0), Three Acre Farms closed at Rs. 109.1 (up 5.1%) and Bairaha Farms moved up 4.1% at its close of Rs. 212.3. Buying side continued to be strong in Dialog Axiata as 14 trades of over 200k shares totalling circa 8.5 million shares were seen picked on the counter at Rs. 8.

Net foreign outflows were Rs. 240.4 million and foreign participation accounted for 10.8% of market activity.

Although yesterday’s run follows on from an upbeat week on speculation that brokers’ credit rules may be relaxed, the ASI has fallen 7.4% to 6,145 year to date and the Milanka Price Index which tracks liquid highly capitalised stocks has dropped 24.89% to 5,304. Market capitalisation has risen 1.31% year-to-date to Rs. 2.23 trillion.