Foreigners see opportunity as Lankans turn bearish

Tuesday, 30 November 2010 00:14 - - {{hitsCtrl.values.hits}}

As expected non-nationals are seeing opportunity in the Colombo stock market besieged by weak heart and credit-hungry locals as the Bourse saw net foreign inflow though indices dipped sharply.

Selective but rapid buying amounting to Rs. 770.6 million by foreigners primarily on JKH and HNB triggered a net inflow of Rs. 6756 million.

“Foreigners collect amid tumbling indices,” headlined NDB Stockbrokers. “Bears continued to dominate the market as indices dropped to the lowest since mid-September. Foreign holding of the counters HNB, JKH, Cargills, Renuka Agri Foods, and Tokyo Cement nonvoting increased. Declining prices seem to have started to attract long term investors,” the stock broker added.

“The indices declined sharply on weak buying despite heavy foreign participation on JKH, accounting for a net foreign inflow for the day,” John Keells Stock Brokers said.

End result was down by 124 points or near 2% whilst MPI dipped by a similar percentage or 134 points. Turnover was a respectable Rs. 2 billion. NDB said Bank Finance & Insurance and Diversified sectors were the highest contributors to the market turnover while both sector indices decreased by 2.62% and 2.15% respectively.

Hatton National Bank made the highest contribution to the market turnover with two crossings of 842,700 shares at Rs. 400 although the share price decreased by Rs. 2.00 (0.50%) and closed at Rs 398. Foreign holding of the company increased by 845,400 shares.

Premier conglomerate John Keells Holdings also contributed significantly to the market turnover with two crossings (527,433 shares at Rs. 301 and 500,000 shares at Rs. 300) although the price decreased by Rs. 3.20 (1.08%) and closed at Rs. 292. Foreign holding of the company increased by 514,956 shares.

Another two crossings were recorded for 1,000,000 shares of Cargills (Ceylon) at Rs. 195 and 12,255,555 shares of Renuka Agri Foods at Rs. 6.30. Foreign holding of the companies increased by 313,700 and 12,255,055 shares respectively.

SEC extends deadline on clearing debt; help for small time investors

In response to stock broker recommendations, the Securities and Exchange Commission (SEC) yesterday partly relaxed its earlier tough stand on provision of credit to investor clients.

The SEC said it granted permission to stock brokers to reduce their current debtor’s positions by at least 50% by 31 March, 2011 and by 100% latest by 30 June, 2011. Previously the deadline for 100% was 1 January, 2011.

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