Buying returns as market gains Rs. 12 b in value

After days of selling spree fresh buying returned to the Colombo Bourse boosting its value by Rs. 12 billion yesterday.

Both indices gained by nearly 0.5% and though modest the improvement was a sigh of relief for most stakeholders in the Colombo stock market.

Analysts said with forced selling almost through, the market went on a buying mode helping prices to improve. Others said the recovery was fragile but given the dip early in the week it was welcome. Wednesday and Thursday the Bourse lost Rs. 59 billion in value.

“The indices rebounded on renewed buying interest in predominantly small cap counters,” John Keells Stock Brokers said.

Turnover was a respectable Rs. 2.5 billion whilst the market saw continuity in net foreign buying with yesterday’s figure being Rs. 16.6 million.

“Indices closed higher today for the first time in the week, having dropped dramatically last two trading days, although they could not sustain gains made during early hours of trading,” NDB Stockbrokers said.

“Although some interest was seen in blue chip counters, once again it was speculative players who dominated the market. ASPI and MPI closed 1.90% and 1.70% lower for the week, respectively,” it added.

Yesterday Hotels and Travels sector was the main contributor to the market turnover (due to Asian Hotels and Properties), while the sector index increased by 1.30%. Asian Hotels and Properties closed flat at Rs. 178.00. Information Technology sector also contributed significantly to the market turnover (due to E-Channeling). The sector index increased 4.38%. E-Channeling gained Rs. 0.60 (8.70%) and closed at Rs. 7.30. Blue Diamond Jewellery Worldwide continued to contribute significantly to the market turnover. The voting-share closed at Rs. 9.50, having appreciated Rs. 1.10 (12.79%). Renewed interest was witnessed in Brown & Company and Environmental Resources both of which closed higher.

Reuters reported stock market  recovered from its five-month closing low on Friday as investors  picked up shares battered in the recent fall, but low liquidity weighed on the market.

Sri Lanka’s main share index edged up 0.49 percent or 34.32 points to 7,050.03, inching up from its lowest since 17 January.  

Reuters also said over 6 billion rupees of cash has been locked in the recent  IPOs by conglomerate ExpoLanka Holdings, which started  trading on Monday, and Softlogic Holdings, which is yet to start  trading on the stock exchange, bourse data showed.  

Foreign investors were net buyers of 16.6 million rupees worth of shares on Friday extending the weekly inflow to 761.9 million for the week, but they have sold a net 6.23 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

The day’s turnover was 2.54 billion Sri Lanka rupees ($23.2 million), slightly above last year’s average of 2.4 billion but below this year’s daily average of 2.93 billion.  

Traded volume was 212.6 million, against a five-day average of 223.4 million. The 30-day and 90-day average trading volumes were 178.7 million and 105.5 million, respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with a 6.2 percent gain, after bringing in the region’s top return of 96 percent last year.