Trading Wednesday - Sri Lanka stocks close up 1.8-pct

By The Nation

Colombo stocks rose today with the ASI headng for its highest close in three weeks, on monetary easing by the CBSL. Earlier today, CBSL reduced the policy rates by 25bps while removing the credit ceiling on the banks in the view of fuelling the economic growth in 2013. Taking the cue, the treasuries declined across all the maturities at today’s auction with 1-yr rate declining by 41bps to 12.45%.

ASI advanced by 98.86 points (+1.8%) to 5,516.64 recording the highest daily gain since September 14th while MPI and S&P LK20 index gained 97.77 points (+2.0%) and 31.34 points (+1.1%) to close at 5,011.19 and 2,994.55 respectively. The market turnover stood at LKR 480.0mn.

Retail investors showed interest across the board with 225 stocks posting gains out of the 238 traded.

The highest contribution for the turnover came from HNB (LKR 88.1mn), Nestle (LKR 49.6mn) and John Keells Holdings (LKR 44.6mn). The three crossings reported in HNB and Nestle accounted for only 18% of the total turnover. The cash map (exl crossings) advanced to 58% reflecting the upbeat momentum of the local investors.

Central Investments and Finance Co (+16%), Stafford Hotels (+13.5%), HVA foods (+10%) and Laugfs Gas-non-voting (+8%) were among the top performers while heavy interest was seen in Peoples Leasing, Nation Lanka Finance and SMB Leasing-non-voting.

Interestingly foreigners were net sellers today, ending two consecutive days of net buying. Foreign participation accounted for 28% of the total turnover with a net outflow amounting to LKR 31mn.

Colombo bourse trades at a price earnings ratio (PER) of 11.9x, below the MSCI emerging markets PER of 12.6x and MSCI frontier emerging market PER of 13.4x, suggesting more room for price increase. The market RSI has increased to 56, still below the overbought level of 70. The technical indicators point towards the possibility of sustaining the positive momentum seen in the last few days.
http://www.nation.lk/edition/biz-news/item/13477-market-boosted-by-monetary-easing.html

COLOMBO, Dec 12 (Reuters) - Sri Lankan stocks rose 1.82 percent to a three-week high on Wednesday after the central bank surprised the market with a 25 basis point rate cut followed by a reduction in yields on government securities.

Sri Lanka's central bank trimmed the key monetary policy rates for the first time in nearly two years to boost economic growth as inflation pressures were expected to ease.

Responding to the rate cut, the yields in government securities also dropped between 35-42 basis points at a weekly auction on Wednesday for the first time in nine weeks.

The Colombo Stock Exchange's main index gained 98.86 points to 5,516.64, its highest close since Nov. 19.

'There should be a market improvement. But sustaining the buying momentum will depend on how soon retail investors will switch to stocks from fixed income,' said one stockbroker.

The day's turnover was at 479.54 million rupees ($3.72 million) turnover. Foreign investors were net sellers of 30.85 million rupees worth of shares. But they have been net buyers of 36.59 billion rupees so far this year.

The rupee closed slightly firmer at 128.65/70 to the dollar compared with Tuesday's close of 128.80/90 on exporter dollar conversion in light trade, dealers said. ($1 = 128.8500 Sri Lanka rupees)

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Jonathan Thatcher) Keywords: MARKETS SRILANKA/

(ranga.sirilal@thomsonreuters.com)(+94-11-232-5540)(Reuters Messaging: ranga.sirilal.thomsonreuters.com@reuters.net)
http://www.xe.com/news/2012/12/12/3109777.htm?c=1&t=

Dec 12, 2012 (LBO) - Sri Lanka stocks closed up 1.8 percent Wednesday after the Central Bank cut rates by 25 percent, driven mostly by domestic buying, brokers said.

The benchmark Colombo All Share Price Index close up 98 points at 5,516.6 and the S&P SL20 Index rose 31.3 points to close at 2,994.5 points up 1.06 percent.

Turnover was 479 million rupees. Domestic sales were 330 million rupees and purchases 361 rupees. Foreign investors sold 148 million rupees of stock and bought 117 million rupees of shares.

Dialog Axiata closed at 8.30 up 30 cents, John Keells Holdings rose 2.60 to close at 214.40 rupees and Sri Lanka telecom rose 1.0 rupees to close at 43.30 contributing most to the gain, in a day where 195 stocks advanced and 29 fell.

Most active companies included SMB Leasing whose not voting stock which closed at 0.50 cents rupee up 10 cents with 12.7 million shares traded and Amana Takaful, an Islamic insurer which closed up 20 cents at 1.70 with 1.79 million shares traded.

Asian Alliance Insurance said it had been investing 177 million rupees in commercial paper of Softlogic Capital Ltd, a related party and earned interest of 7.4 million rupees up to November 30.
http://lbo.lk/fullstory.php?nid=774556787

Twin policies of interest rate cut especially and lifting of credit ceiling on banks yesterday boosted investor sentiment on equities, with market capitalisation rising by Rs. 38 billion.

The benchmark ASI shot up by 99 points (1.8%) after having peaked to a high gain of 106 points and MPI by 98 points (2%) whilst the S&P SL 20 index rose by 31 points (1%) on the back of investors re-rating the CSE’s upturn following the Central Bank cutting policy rates by 25 basis points as well as lifting the 18% growth ceiling on credit from end of this month. The only concern was the relatively low turnover of Rs. 457 million, but analysts expect investors, especially retailers, to return on the strength of policy stimulus.

The market, which has been basking in the glory of record Rs. 37 billion in net foreign inflow so far, saw a marginal Rs. 37 million net selling yesterday.

The rate cut signalled the Government’s intention to gradually brace for a low interest rate regime from now onwards, lifting the spirits of the equity market. The rising interest rate scenario was a damper for the Colombo Bourse, down by 11% until the rebound since Monday, as fixed income options were more attractive for investors.

“With the possibility of a falling interest rate coupled with likely improvements in corporate earnings in the medium to long term, we recommend investors to focus on fundamentally-sound counters which are trading at attractive valuations,” Asia Wealth Management said yesterday.

Lanka Securities said Colombo Bourse trades at a price earnings ratio (PER) of 11.9x, below the MSCI emerging markets PER of 12.6x and MSCI frontier emerging market PER of 13.4x, suggesting more room for price increase.

“The market RSI has increased to 56, still below the overbought level of 70. The technical indicators point towards the possibility of sustaining the positive momentum seen in the last few days,” Lanka Securities said, adding, “The cash map (excluding crossings) advanced to 58% yesterday, reflecting the upbeat momentum of the local investors.”

DNH Financial, however, sounded cautious. “Although the interest rate cut is encouraging, we do not believe that this is likely to shift significant funds into the equities market at least in the short term, given the relative dichotomy between interest rates and the Sri Lankan Bourse,” it said.

“With regard to the market trajectory, the Bourse is likely to continue to trade range bound in the short-term, although we may see increased foreign and institutional activity in the medium-term, given that valuation multiples for select companies have become highly appealing,” DNH Financial added.

Yesterday block trades in Hatton National Bank for the second consecutive day and Nestlé helped to boost turnover levels. Retail interest was evident in SMB Leasing, Amana Takaful, and Free Lanka Capital Holdings, according to NDB Stockbrokers.

Lanka Securities said the highest contribution for the turnover came from HNB (Rs. 88.1 million), Nestle (Rs. 49.6 million) and John Keells Holdings (Rs. 44.6 million).

Softlogic Stockbrokers said banking cluster players gathered focus following Central Bank moves. Interest in Hatton National Bank persisted as the counter encountered a further two blocks constituting 467,000 shares, which changed hands at Rs. 140 (-0.7%), after which its price touched an intra-day high of Rs. 143 (+1.4%) before closing with a marginal dip at Rs. 140.7.

Commercial Bank and National Development Bank witnessed some on-board interest as each counter advanced 2% and 0.8% at their respective peak levels before closing with gains of 1.6% and 0.08% at Rs. 101.6 and Rs. 132.

Nestlé Lanka, which witnessed an intra-day high of Rs. 1,506, highlighted the crossings board with a block of 15,000 shares at a 52-week high price of Rs. 1,500 during mid-trading hours. Interest stayed in People’s Leasing and Finance Company, with its attractive dividend yield of 8.1%. The counter saw several on-board blocks between price levels of Rs. 12.5-13 before it closed with a dip of 2.2% at Rs. 13.

John Keells Holdings was noted in the top turnover slot with majority of interest weighing on the buying side.

The counter witnessed a transaction of 78,000 shares at its intra-day low level of Rs. 211.8, followed by which its price shot up to Rs. 215 (+1.5%).

S&P calibre players, Ceylon Tobacco (+0.04%), Distilleries (+1.72%) and Chevron Lubricants (+1.75%), too saw some interest, while the latter two counters gained 1.7% and 1.8% at their peaks of Rs. 154.1 and Rs. 198.
http://www.ft.lk/2012/12/13/policy-stimulus-boosts-colombo-bourse-value-by-rs-38-b/

Sharpest recent single-day surge on Colombo bourse
Interest in blue chips
December 12, 2012, 8:54 pm
The Island

The Colombo bourse yesterday saw one of its sharpest recent single-day gains with all three indices moving up tidily on investor interest in fundamentally strong blue chips, brokers said.

Though turnover at Rs.479.5 million was down from the previous day’s Rs.489 million, the indices moved up strongly with the All Share Price Index gaining 98.86 points (1.82%), the Milanka 97.77 points (1.99%) and S&P 31.34 points (1.06) with 224 gainers way ahead of 19 losers while 68 counters closed flat.

"Advancers outweighed decliners by over 11:1 causing the ASPI to reach a 17 day high, on the back of positive investor sentiment following a 25 basis point rate cut by the CBSL today,’’ John Keells Stock Brokers said in a market report.

``Activity levels were led by trades on JKH, HNB, and NEST, which collectively accounted for over 35% of market turnover, inclusive of crossings."

Foreigners were net sellers with sales at Rs. 148.58 million against purchases of Rs. 117.73 million leading to a net outflow of Rs. 30.85 million.

Crossings in HNB where nearly 0.5 million shares changed hands at Rs.140 contributing Rs.65.5 million to turnover and Nestle where 15,000 shares were crossed at Rs.1,500 in a deal worth Rs.22.5 million was less dominant than on the previous day.

Brokers said that the Central Bank moving towards easing monetary policy has sent favourable signals to the market although turnover volumes were unexciting.

``Investor interest in fundamentally strong stocks is evident,’’ a broker said.

JKH topped the turnover league with 0.2 million shares traded, closing Rs.3.20 up at Rs.215 trading between Rs.221.80 and Rs.215 and contributing Rs.44.6 million to turnover.

High-priced Nestle, which has recently seen activity, generated the day’s second highest turnover with 18,038 shares traded between Rs.1,500 and Rs.1,506 gaining 30 cents to close at Rs.1,500.60 contributing Rs.27.1 million to turnover.

HNB (voting) was next closing a rupee down at Rs.140 on nearly 0.2 million shares done between Rs.140 and Rs.143 generating a turnover of Rs.22.6 million.

Commercial Bank closed Rs.1.10 up at Rs.101.10 on over 0.2 million shares done between Rs.100 and Rs.102 contributing Rs.22 million to the day’s turnover.

Other most traded blue chips included NDB closing 60 cents up at Rs.132.50 on 0.1 million shares, Ceylon Tobacco up 30 cents to close at Rs.760 on 13,392 shares, Chevron up Rs.3.50 to close at Rs.198 on 45,082 shares and Distilleries up Rs.2.60 to close at Rs.154.10 on 52,609 shares.