Positive corporate earnings but Bourse struggles

Positive corporate earnings released so far have failed to boost investor sentiments at the Colombo Bourse as it began a new month on a mixed note.

The stock market pared early gains and closed on a mixed note. The stocks rallied in first half echoing similar gains in previous sessions but lost steam in the latter part to close with marginal gains. The ASI relinquished most of a 26-point gain, ending 4.54 points or 0.1% higher at 7,336.59. S&P SL 20 index closed at 4,088.69 with a drop of 19.28 points or 0.5%. “The batch of corporate earnings was remarkably positive, but it failed to lift the market sentiment as most of the good news has been factored in the share prices,” opined Lanka Securities. The tile segment, Lanka Wall tiles, Lanka Ceramics & Lanka Tiles posted profit growth in excess of 35%, but the share prices did not incline notably in yesterday’s session.

Further, Seylan Bank- voting closed slightly lower despite 54% growth in profits in June quarter John Keells Holdings closed 1.5% lower at Rs. 194.00, subsequent to the mere 2% profit growth posted in June quarter. Further, weak sentiments in index-heavyweights such as Bukit Darah (Rs. 651.00,-2.6%), Nestle Lanka (Rs. 2,003.50,-0.9%) and Carsons Cumberbatch (Rs. 395.00, -1.3%) pulled S&P SL 20 index lower while positive performance in counters such as Ceylon Cold Stores (Rs. 425.00,+4.9%) and Ceylon Tobacco (Rs. 985.00,+3.6%) supported the ASI to close in positive territory. The market breadth was positive with winners surpassing losers 116 to 84 while 48 counters remained unchanged. The cash map remained unchanged at 53%.

The market turnover was Rs. 984mn. The only negotiated deal in the session was recorded in Commercial Bank where 0.4mn shares changed hands at Rs. 170.00 per share. The crossing accounted for mere 8% of the turnover. Royal Ceramics attracted investor interest after its subsidiaries posted notable profits and the counter was the top contributor to the turnover with Rs. 99mn.

Pan Asia Bank touched a 52 week high of Rs. 28.60 and managed to close 4.8% higher at Rs. 28.20 subsequent to the hefty 238% growth in quarter earnings while LB Finance closed at Rs. 129.50 with 4.1% gain following the 73% growth in profits. Moreover, Lanka Ventures also closed 3.8% higher at Rs. 46.00 driven by 35% growth in quarter profits and the final dividend of Rs. 1.75 per share. Overseas Realty, which posted 3% fall in quarter profits closed at Rs. 25.00 with a drop of 1.2%.

Lanka Securities said 14 counters touched 52 week highs, where the three poultry sector counters, Ceylon Grain Elevators, Three Acre Farms and Bairaha Farms continued to post fresh 52 week highs. Moreover, finance sector counters such as Sanasa Development Bank, Vallibel Finance, Singer Finance, Sofltogic Finance also touched 52 week high prices in yesterday’s session along with Hemas Holdings and ACL Cables.

[size=30]Rupee up as state bank cuts dollar peg[/size]

Reuters: The rupee ended firmer on Monday as a state-run bank cut the currency’s peg against the dollar by 10 cents to allow the exchange rate to appreciate to 133.50, dealers said.
Dealers said after the move importer dollar demand was offset by inward remittances.
One of the two state banks, through which the Central Bank usually directs the market, sold dollars at Rs. 133.50 each in the market to keep the local currency steady, they said.
“There is no solid reason why they have dropped the rates, but certainly there is a drop in imports ahead of elections,” said a currency dealer asking not to be named.
The spot rupee closed 10 cents higher at 133.50 on Monday, after ending steady for two straight sessions at 133.60 per dollar.
Some dealers expect the currency to be less volatile until the 17 August parliamentary elections.

Courtesy: daily Financial Times 4 August 2015