Bourse jumps over 1.6%; surpasses 5,000 points mark

Softlogic Equity Research: The bourse witnessed long lapsed activity levels stepping up to touch 5,000 points Wenesday backed by notable improvement in investor participation after prolonging at 4,900 levels for sometime. The benchmark index sustained its path in the green along with the MPI and the S&P SL20 while all the MPI counters gained which led to the MPI outperforming the ASPI at its intra-day high of 4705.88 points (+2.4%). The S&P SL20 index saw a similar pattern with 19 out of the 20 counters closing in the green while the ASPI touched an intra-day high of 1.49% at 5,019.21 points.

Aitken Spence grabbed the spotlight spearheading the day’s turnover with its recent foreign interest and its 52 week low of LKR100.00 on Monday. The counter saw 4 blocks of 800k shares being picked on board at LKR110.00 while a further 400k shares were picked at LKR110.50 before it closed at LKR110.70 (0.91%)

Foreign favourite, John Keells Holdings retained interest as it was concreted in the top turnover slots with an intra-day high of LKR199.50 (+0.75%) before closing at LKR199.00 (+0.51%). The counter recorded 2 off-market transactions amounting to c.405k shares at LKR199.40.

Renewed interest was witnessed in Chevron Lubricants as it saw an appreciation of 6.3% for the day as touched its 52 week high of LKR185.00 and a 6.2% gain before it closed at LKR181.90. Two off-board deals were executed amounting to 469k shares at LKR180.00.

Expo Lanka Holdings was tapped up from its dormant pose as it witnessed several sizable transactions on-board with a block of 1 mn shares at LKR6.00 being the most significant for the day. The counter closed with a gain of 8.47% at LKR6.30. Renewed participation was also witnessed in Acme Printing and Packaging and ACL Cables as the former edged up to the top turnover slot closing flat for the day at LKR15.30 while the latter saw a gain of 2.8% at its high of LKR58.60 followed by an on-board block of 95k transacted at LKR58.00 before it closed at LKR 58.00(+1.75%)

Contributions from banking sector players was notable whilst the key gainers for the day were Nations Trust Bank (+5.18%), Sampth Bank (+3.67%), Hatton National Bank Non-Voting (+3.19) and Voting (+2.87%).

Sampath Bank edged up 3.9% at its intra-day high of LKR172.50 before it closed at LKR 171.40. Further, buying interest emerged in Commercial Bank as a block of 175k was picked on-board at LKR102.50.

Investors persisted their interest in Lanka Orix Leasing Company as two large blocks amounting to 393.4k were traded at LKR40.00, The counter closed with a gain of 2.76% at LKR40.80

Central Finance was highlighted with a crossing of 193k shares being transacted at LKR130.00 while it was seen closing at its intra-day high of LKR135.00 (+3.6%).

Penny play was strongly rooted around Browns Investments and Free Lanka Capital which surged 17.86% and 9.52% at its closing prices of LKR3.30 and LKR2.20 respectively. The former witnessed a block of c.216k shares being taken on-board atLKR3 while the latter saw 9 large blocks of shares transacted at price levels of LKR2.20 and LKR2.30.
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A fresh burst of buying across the Board yesterday boosted the Colombo Bourse, sending the benchmark All Share Index above the psychological 5,000 points level after a two-month languish.

Brokers and analysts linked the revival yesterday to investor sentiments rebounding, a move which is likely to silence pessimists and doomsayers. The market’s value rose by Rs. 32 billion to Rs. 1.922 trillion.

“The indices climbed sharply higher on the back of renewed buying interest across the board,” John Keells Stockbrokers said. NDB Stockbrokers echoed same when it said: “The market witnessed gains across the board with the ASPI and MPI gaining 82 and 99 points respectively with continuing foreign net inflows.” DNH Financial said: “Reversing the lackadaisical trend observed during the last few days, the ASPI penetrated the psychologically important resistance level of 5,000 to close at 5,027 on the back of selective buying in a number of blue-chip counters.”

Softlogic Stockbrokers said the S&P SL20 index gained by 36 points with 19 out of the 20 counters closing in the green.

Asia Wealth Management said: “Signs of revival were witnessed in the Bourse, where the turnover levels were mainly spearheaded by fundamentally strong counters.”

SC Securities said market turnover improved to Rs. 783.2 million on the back of a few high value block trades in John Keells Holdings PLC (JKH), Chevron Lubricants Lanka PLC (LLUB) and Central Finance Company PLC (CFIN).

The top turnover generators for the day were Aitken Spence PLC (SPEN) (Rs. 133 million), JKH (Rs. 125 million), LLUB (89.4 million), CFIN (Rs. 29.5 million) and Sampath Bank PLC (SAMP) (Rs. 22.69 million). The five counters accounted for 51% of the total market turnover.

NDBS said Banking and Finance sector counters continued the bull run, with Sampath Bank, Commercial voting and nonvoting and NTB leading the list. Retail activity was also seen in Tess Agro, Browns Investments and Acme Printing.

Diversified sector emerged as the top contributor to the market turnover (due to Aitken Spence and John keels Holdings) and the sector index gained 1.68%. The share price of Aitken Spence edged up Rs. 1 (0.91%) to close at Rs. 111 while the share price of John Keells Holdings also increased by Rs. 1 (0.51%) to close at Rs. 199. Foreign holding of John Keells Holdings increased by 489,732 shares.

Reuters, which cites regulatory issues when market is down, didn’t have a clear reason for yesterday’s rebound. However, quoting unnamed analysts, Reuters repeated something it has said of late: “The resignation of the Head of the Securities and Exchange Commission, Tilak Karunaratne, still weighed on sentiment.”

Nevertheless, Reuters noted foreign investors were net buyers for a 23rd straight day as financials led the field.

“Foreign investors bought a net Rs. 192.5 million ($ 1.46 million) worth of shares, extending the net foreign inflow this year to Rs. 28.26 billion. They have bought a net 4.74 billion rupees worth of stocks in the last 23 sessions,” Reuters said.

It quoted Bartleet Religare Securities as saying there were many traders waiting to unload once the market hits around 5,500. “Until then, I see this market building momentum,” Reuters quoted a broker as saying.
Lanka Securities said most counters saw bullish activity as the recent positive trend seems to be having a lasting effect. “However, the worrying factor would be the rising rate of interest,” it added.

DNH in its market report said contrary to the rhetoric of some that investing in the Colombo Bourse can largely be akin to a game of blindfold darts, it takes a markedly different view.

“Ours is based on the belief that the market will deliver measurable positive results provided that the right investment strategy is employed over a reasonable investment horizon,” DNH said.

While the equity market has a notorious tendency to rush from one side to another in response to the ebb and flow of optimism or pessimism, DNH recommends investors to now make a directional call, build a quality portfolio and take advantage of what is increasingly becoming a ‘stock pickers’ market.

“Consequently, we advise investing in high quality cash-rich companies with strong balance sheets that have underperformed during periods of market over-exuberance and which have the upside potential to re-rate to their intrinsic values,” DNH Financial said.
http://www.ft.lk/2012/08/23/buying-across-the-board-sends-asi-above-5000-points-mark/

Sri Lankan stocks jumped more than 1.6 percent to a two-month high yesterday with foreign investors net buyers for a 23rd straight day as financials led the field.

The Colombo Stock Exchange’s main index rose 82.27 points to 5,027.40, its highest level since June 22.

Foreign investors bought a net Rs.192.5 million ($1.46 million) worth of shares, extending the net foreign inflow this year to Rs.28.26 billion. They have bought a net Rs.4.74 billion worth of stocks in the last 23 sessions.

Bartleet Religare Securities said there were many traders waiting to unload once the market hits around 5,500.

“Until then, I see this market building momentum,” a broker said.

The market has fallen 17.24 percent so far this year. Analysts said the resignation of the head of the Securities and Exchange Commission, Tilak Karunaratne, still weighed on sentiment.

Turnover was Rs.782.9 million, less than this year’s daily average of Rs.862.4 million.

The rupee ended weaker at 132.28/35 against the dollar from Tuesday’s close of 132.27/30 on importer dollar demand in light trade.
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