Odel deal propels net foreign inflow to over Rs. 25 billion

The execution of the previously announced 42% stake sale in Odel to Parkson Retail Asia of Singapore yesterday propelled the year-to-date net foreign inflow to over Rs. 25 billion, which remains the stock market’s sole silver lining.

The stake amounting to 60.625 million shares was done at Rs. 23.50 in a deal worth Rs. 1.42 4 billion.

Overall 61.269 million Odel shares traded via 147 transactions for Rs. 1.439 billion. Following the deals during initial minutes of trading, Odel gathered considerable buying interest as several large trades were seen taken on board including 906,000 share transaction at Rs. 23.50 each. Consequently the counter made up 74% of the day’s total turnover and closed with a marginal dip at Rs. 22.50.  Apart from acquisition of Odel shares, market saw additional foreign buying bringing the total to Rs. 1.76 billion and a net inflow of Rs. 1.53 billion, bringing the total to around Rs. 25.6 billion.  Baring foreign activity, the main indices moved on a volatile note during the day’s trading ahead of the broker community meeting with the Treasury Secretary.

Softlogic Stockbrokers said the broader index swung between gains and losses as it touched a high of 4,946.88 (up 11.4 points), before settling with 9.4 point advance at 4,944.9 points. The S&P SL20 index also secured a gain of 7.3 points with increase in value in National Development Bank (+3.6%), Ceylon Tobacco (+2.2%), CT Holdings (+7.3%), Hatton National Bank [Non-Voting] (+1.7%) and Dialog Axiata (+1.7%).  

The liquid MPI trimmed Monday’s gains as it plunged 19.7 points to close at 4,357.0 points.

Year to date ASI is down 18.6%, whilst MPI is a negative 16.7% and the S&P SL 20 Index is down 10.2%.

“Investors seemed to be responding to positive earnings announcements that flow in with accumulation seen in the counters which has posted steady earnings growth. Moreover the enhanced enthusiasm of the foreign participants has also encouraged locals to some extent, yet having substantial room for improvement,” Softlogic said.  

“We expect local investor attention towards the equities would enhance as the interest rates show signs of stability as the benchmark yields remained largely flat at auction as well,” it added.

John Keells Holdings (JKH) extended interest as the counter recorded six further crossings totalling to 1.6 million shares each being dealt at Rs. 186. The counter closed at its low of Rs. 183.90 with a slight dip, leaving room for accumulation.

Softlogic said buying interest heaved up in motor sector player, United Motors, following impressive earnings release. The counter having recorded a staggering 136% YoY growth in its net earnings saw its price increasing by 10% at its close of Rs. 71.50.

On the contrary, selling pressure was visible in Bukit Darah and Asian Hotels & Properties as the latter closed with a 5.1% slump at Rs. 75.10. Retail play reactivated in Acme Printing & Packaging, whilst interest also renewed in Access Engineering. Similar interest was evident in Renuka Agri Foods, as the counter saw a large trade carrying 1.1 million shares being handled in the market at Rs. 4.20.

Ceylon Tobacco having announced attractive earnings growth during 2Q2012 (up 32% YoY), witnessed buying interest as it closed at its high of Rs. 695 (up 2.2%). Retail favourite, Free Lanka Capital Holdings continued to attract attention as the continued to witness large trades on board where it closed flat at Rs. 2.20.