Trading Tuesday - Sri Lanka stocks close down 0.9-pct, rupee stronger

Jan 29, 2013 (LBO) - Sri Lanka stocks closed down 0.9 percent Tuesday with retailers and foreign investors taking profits, while the rupee gained with foreign inflows, brokers and dealers said.

The Colombo All Share Index closed at 5,800 points down 54 points and the S&P SL20 Index close down 8.9 points at 3,185.76 down 0.28 percent. Turnover was 1.35 billion rupees.

In forex markets the rupee strengthened to as much as 126.50/60 levels against the US dollar in the spot market from 127.10/15 levels with foreign inflows coming into government bonds, dealers said. In late trading the rupee was quoted around 127.65/70 rupees to the dollar.

Colombo's stocks had gained around 5 percent over the past months and is taking a breather with some uncertainty also creeping in with possible US action at the United Nations over rights violations and rule of law, brokers said.

"Market went through a decent rally and some retailers and foreign investors are taking profits," Abhishek Kalupathirana, an analyst at Lanka Securities, a Colombo brokerage said.

"But even today we saw foreign interest in some stocks like Sampath and JKH."

Sampath gained 5.40 to close at 219.60 rupees. JKH closed at 225.10 rupees up 10 cents.

Kalupathirana says investors should look at value stocks instead of going by herd instinct.

For example investors can look at industries as a whole such as dairy, construction and tourism which there has been recognized by the government for rapid expansion, which have potential to grow.

"The dairy industry for example, the government wants the country to be self-sufficient in dairy production by 2016," he says.

"However, we should remember that all businesses have risks attached to it."

Over the past few months, companies such as Nestle have seen steep gains, with foreign investor interest also seen, but once prices have risen even well-managed company may be less attractive than another firm which has better value, he says.

Ceylon Tobacco Company, a firm with a near monopoly and high cash dividends which made steep gains over the past year fell 38.40 rupees to 840.40.

DFCC Bank closed flat at 125 rupees, Distilleries fell 2.00 rupees to close at 183.00 and Commercial Bank closed down 10 cents at 104.90 rupees.
http://www.lbo.lk/fullstory.php?nid=130787662

WRITTEN BY THARANGA SENARATNE
Jan 29, 2013 (LBT) - Following the heavy volatility in the bourse coupled with the slow downward trend during the last few trading days led to a sharp fall in the market indices today resulting in the benchmark index plunging by 54 points to close at 5,800.8 while the S&P SL20 which contains more of the steady lot too experienced a dip though at a much slower pace closing down by 9 points. Dividend play counters Ceylon Tobacco (-4.2%) and Nestle (-2.8%) were the main negative contributors to the index.

The market recorded a sharp rise in turnover primarily on selected blue chip counters with 11 crossings during the day contributing 62% of the day’s turnover. Foreigners led the buy side of the downhill market understanding the attractiveness of the current market valuations. Net foreign inflow for the day was LKR830 mn reversing the YTD net foreign outflow figure to an YTD Net foreign inflow of LKR0.4 bn. We advise investors to take maximum use of this opportunity to pick the hidden gems that dip in value. Foreign interest in Sampath Bank continued to yet another week as the counter dominated the market turnover today reaching a 52-week high price of LKR221.8. The counter registered 5 off-market deals accounting for 1.4mn shares at prices LKR218.5 and LKR220.0. The counter was on uptrend during on board trading today as it traded between LKR212.5 and LKR221.8 while recording number of blocks out of which a 100k share block was traded at LKR220.0. The counter witnessed a 2.5% gain to finally close the day at LKR219.6.

John Keells Holdings was in second place in the turnover list with crossings under its belt accounting for 1.2mn shares changing hands at the same price of LKR226.0. Buying interest in the blue chip conglomerate remained strong with 533k shares trading onboard as the counter recorded a closing price of LKR225.1 (+0.1%). Lanka Orix Leasing also recorded off-market deals of 3.5mn shares at LKR72.5. After a considerable period of lapse, investor interest was noted in manufacturing sector counter Royal Ceramics (-2.7%), whilst interest extended in the construction sector counter Access Engineering. Europe Stocks Little Changed as Investors Await US Data: European stocks were little changed before reports that may show US consumer confidence declined for a third month, while home prices increased. US index futures were also little changed, while Asian shares advanced. The Stoxx Europe 600 Index climbed less than 0.1% to 289.42 at 9:58 a.m. in London. Brent Trades near Three-Month High on Economic Confidence: Brent crude traded near a three- month high after reports from Germany to South Korea signalled increased confidence in the global economic recovery, potentially spurring oil demand. Brent for March settlement advanced as much as 21 cents, or 0.2%, to USD113.69 a barrel on the ICE Futures Europe exchange in London.
http://lbt.lk/stock-market/movement/3560-foreigners-on-buying-spree-with-a-nfi-of-lkr-830-mn