Stock market ‘moves up’ to 5-week high

Colombo shares on Thursday opened trading on a strong note led by premier blue-chip John Keells Holdings, on the back of the 'positive' meeting between Treasury Secretary and industry stakeholders on Tuesday, analysts said.

They said that this meeting with the Treasury Secretary, Dr. P B Jayasundera saw discussions on how all stakeholders as a whole should uplift the bourse. Credit rules were promised to be reconsidered and the government pledged to help revitalize the market and help brokers and improve their capacities, risk management and market development at this meeting with the top blue chip companies too is to be scheduled.

Some analysts noted that most retail-active counters were showing activity but the market seemed to lose steam towards the latter part of trading today.

The All Share gained 15.19 points (0.31%) to close at 4,960.05, Milanka increased 38.64 points (0.89%) to close at 4,395.66 and the S&P index gained marginally by 5.95 points (0.21%) to close at 2,791.68. Turnover was Rs. 754 million.

Top contributors to turnover were John Keells Holdings with Rs.373.7 million, Hatton National Bank with Rs. 64.61 million and PCH Holdings with Rs. 54.58 million. Most active counters for the day were Colombo Land and Development, Citrus Kalpitiya and Ceylon Grain Elevators.(DEC)
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The Colombo Stock Exchange closed in positive territory yesterday (02) with all three indices making gains.

The All Share Price Index gained 15.19 points, up 0.31 percent to close at 4,960.

The Milanka Price Index of more liquid stocks gained 38.64 points to close 0.89 percent higher at 4,395.66 while the S&P SL20 gained 5.96 points to close at 2,791.68, up 0.21 percent from the previous close.

Turnover reached Rs. 754.5 million on a volume of 26.4 million shares.

Year-to-date, the bourse had fallen 18.3 percent.

Net foreign inflows amounted to Rs. 102.5 million, with buying amounting to Rs. 357.4 million. Year-to-date, around Rs. 25.9 billion has flown into the stock exchange.

"The ASPI raced upwards during the start of trading before cooling off to remain mostly flat after an hour of spike. Sentiments bloomed as investors were confident after the Secretary to the Treasury’s promised to reconsider credit rules, one of the backslappers of the bourse," Softlogic Equity Research said.

"With the caption of the high index counters on top of the turnover list, with some silent accumulation taking place, the confidence level in the earnings of these companies is highlighted. John Keells Holdings, Distilleries Company of Sri Lanka, Sampath Bank, Commercial Bank, Ceylon Tobacco and DFCC Bank; have all taken the top slots of turnover rankings for the day.

"John Keells Holdings, which had been the recent foreigner’s darling stock, went on with its strong tone to puff up the day’s turnover figures by c.49.5%. The day’s foreign involvement stood at an inflow of LKR102.5 mn as they retained their position above the LKR25 bn inflow line. Two off market trades in the heavy weight carrying 1.2 mn shares in total at LKR185.0 initiated the counter’s best bit for the day as four additional on-board transactions totaling 736.6k shares at LKR185.0 followed.

"These times are a fact of investing life. You can survive and prosper if you know where lay your money during such quiet days. The foreign slow reactivation is one of the best timing signals for you to step in. A caliber of local investors have recognized this rock bottom point and have already initiated their accumulation process whilst many others with the herd mentality are still on the shore missing the boat. However, the rise in the six month bill’s weighted average yield reflecting the rising inflationary pattern amidst a declining trend in the auctions has caused a sense of confusion amongst investors on the next T-Bill auctions]," Softlogic Equity Research said.
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The Colombo Bourse yesterday produced an encouraging rebound largely powered by improved sentiments following a capital market stakeholder meeting with Finance Ministry Secretary Dr. P.B. Jayasundera on Tuesday.

After a sharp rise in early morning trade, the market cooled off with a degree of profit taking with the ASI closing up 0.3% or 15 points to 4,960, the highest since June 29. Market’s value rose by Rs. 7 billion, one of the highest day gains of late.

“Trading on the bourse opened on a positive note supported by last Tuesday’s meeting between government officials and brokers aimed at addressing market concerns and uplifting investor sentiment,” DNH Financial said adding the market saw relatively improved investor participation.

Market turnover rose to Rs. 754 million with trading in premier blue chip John Keells Holdings, banking heavyweight Hatton National Bank and new diversified entity PCH Holdings accounting for 25% of the day’s total.

“Sentiments bloomed as investors were confident after the Secretary to the Treasury’s promised to reconsider credit rules, one of the backslappers of the bourse,” said Softlogic Stockbrokers. “With the caption of the high index counters on top of the turnover list, with some silent accumulation taking place, the confidence level in the earnings of these companies is highlighted. John Keells Holdings, Distilleries Company of Sri Lanka, Sampath Bank, Commercial Bank, Ceylon Tobacco and DFCC Bank; have all taken the top slots of turnover rankings for the day,” it added.

Reuters also said the market gained on hopes the Government will act to revive trading on an exchange that has fallen 18 percent so far this year.

“The market has responded positively to the (Treasury) meeting outcome, but it will take a lot more time to see policy action being implemented,” Reuters said quoting an unnamed stockbroker.

The action includes an enhanced credit facility to revive retail investor interest in the short term and steps to build broker capital infrastructure in the medium term.

NDB Stockbrokers headlined its report as “Bullish sentiments” and said multinational Ceylon Tobacco Company touched the Rs 700.00 mark, while heavy weight John Keells Holdings attracted institutional and high net worth interest. The counter witnessed two parcels changing hands to end the day with a marginal gain. Hatton National Bank saw a parcel changing hands at a premium price while a significant block of PCH Holdings also got traded during the latter part of trading. The share price of John Keells Holdings gained Rs 1.10 (0.60%) to close at Rs 185 whilst the share price of Hatton National Bank increased by Rs 0.80 (0.60%) to close at Rs 134.

Accumulation was evident in Distilleries Company as the counter saw a 150,300 share block being taken on board at Rs. 120.

The poultry feed miller’s charm of 366% YoY growth in earnings for 2Q2012 have led the retailers to blindly involve in the counter as it was seen reaching a high of Rs. 51.90 before its close at Rs. 50.60 (up 2.25%).

Softlogic Equity Research has signaled investors to be cautious on the counter as Ceylon Grain Elevators’ earnings has been led by one-off gain in disposal of its associate as it continues to battle with working capital issues created by dollar appreciation, gross profit margin pressure and high finance cost.

Acme Printing & Packaging topped the speculative play list as it was seen rallying as much as Rs. 16.2 before settling at Rs. 15.5 at close. Retail participation was prominent in Colombo Fort Land & Building,

Lanka Hospital Corporation, Fee Lanka Capital, Kalpitiya Beach Resorts, E Channelling and Blue Diamonds [Non-Voting].

Foreign investors were net buyers of Rs. 102.5 million extending the net foreign inflow this year to Rs. 25.7 billion ($194.92 million).

The rupee meanwhile closed steady at 131.70/132.10 against the dollar, as importer dollar demand offset banks dollar sales.

Dealers expect the rupee to weaken further on expected importer dollar demand.

DNH Financial in its daily report said despite the country’s robust macro-economics (notwithstanding the current inflationary pressures), it is very disappointing to note that the Sri Lankan bourse has significantly underperformed the majority of global markets this year having declined by 31%YTD in dollar terms.

“While most market commentators have cited no credible reason for the market’s decline, we believe that it is purely a matter of negative domestic investor sentiment that has stifled investment flows into the bourse over the last couple of months, although in contrast, foreign investors have been cherry picking investments especially in blue chip counters. Consequently, we believe the biggest risk to the bourse now is not one of fundamentals but that of negative domestic investor sentiment that is denting performance and barring the market from re-rating to higher levels. We advise domestic investors to break away from the herd and select bluechip stocks with a medium to longer term investment horizon,” DNH Financial added.
http://www.ft.lk/2012/08/03/stock-market-moves-up-to-5-week-high/

he Colombo Bourse yesterday produced an encouraging rebound largely
powered by improved sentiments following a capital market stakeholder
meeting with Finance Ministry Secretary Dr. P.B. Jayasundera on Tuesday.

After a sharp rise in early morning trade, the market cooled off with
a degree of profit taking with the ASI closing up 0.3% or 15 points to
4,960, the highest since June 29. Market’s value rose by Rs. 7 billion,
one of the highest day gains of late.
“Trading on the bourse opened on a positive note supported by last
Tuesday’s meeting between government officials and brokers aimed at
addressing market concerns and uplifting investor sentiment,” DNH
Financial said adding the market saw relatively improved investor
participation.
Market turnover rose to Rs. 754 million with trading in premier blue
chip John Keells Holdings, banking heavyweight Hatton National Bank and
new diversified entity PCH Holdings accounting for 25% of the day’s
total.
“Sentiments bloomed as investors were confident after the Secretary to
the Treasury’s promised to reconsider credit rules, one of the
backslappers of the bourse,” said Softlogic Stockbrokers. “With the
caption of the high index counters on top of the turnover list, with
some silent accumulation taking place, the confidence level in the
earnings of these companies is highlighted. John Keells Holdings,
Distilleries Company of Sri Lanka, Sampath Bank, Commercial Bank, Ceylon
Tobacco and DFCC Bank; have all taken the top slots of turnover
rankings for the day,” it added.
Reuters also said the market gained on hopes the Government will act to
revive trading on an exchange that has fallen 18 percent so far this
year.
“The market has responded positively to the (Treasury) meeting outcome,
but it will take a lot more time to see policy action being
implemented,” Reuters said quoting an unnamed stockbroker.
The action includes an enhanced credit facility to revive retail
investor interest in the short term and steps to build broker capital
infrastructure in the medium term.
NDB Stockbrokers headlined its report as “Bullish sentiments” and said
multinational Ceylon Tobacco Company touched the Rs 700.00 mark, while
heavy weight John Keells Holdings attracted institutional and high net
worth interest. The counter witnessed two parcels changing hands to end
the day with a marginal gain. Hatton National Bank saw a parcel changing
hands at a premium price while a significant block of PCH Holdings also
got traded during the latter part of trading. The share price of John
Keells Holdings gained Rs 1.10 (0.60%) to close at Rs 185 whilst the
share price of Hatton National Bank increased by Rs 0.80 (0.60%) to
close at Rs 134.
Accumulation was evident in Distilleries Company as the counter saw a 150,300 share block being taken on board at Rs. 120.
The poultry feed miller’s charm of 366% YoY growth in earnings for
2Q2012 have led the retailers to blindly involve in the counter as it
was seen reaching a high of Rs. 51.90 before its close at Rs. 50.60 (up
2.25%). Softlogic Equity Research has signaled investors to be cautious
on the counter as Ceylon Grain Elevators’ earnings has been led by
one-off gain in disposal of its associate as it continues to battle with
working capital issues created by dollar appreciation, gross profit
margin pressure and high finance cost.
Acme Printing & Packaging topped the speculative play list as it
was seen rallying as much as Rs. 16.2 before settling at Rs. 15.5 at
close. Retail participation was prominent in Colombo Fort Land &
Building, Lanka Hospital Corporation, Fee Lanka Capital, Kalpitiya Beach
Resorts, E Channelling and Blue Diamonds [Non-Voting].
Foreign investors were net buyers of Rs. 102.5 million extending the
net foreign inflow this year to Rs. 25.7 billion ($194.92 million).
The rupee meanwhile closed steady at 131.70/132.10 against the dollar, as importer dollar demand offset banks dollar sales.
Dealers expect the rupee to weaken further on expected importer dollar demand.

DNH Financial in its daily report said despite the country’s robust
macro-economics (notwithstanding the current inflationary pressures), it
is very disappointing to note that the Sri Lankan bourse has
significantly underperformed the majority of global markets this year
having declined by 31%YTD in dollar terms.
“While most market commentators have cited no credible reason for the
market’s decline, we believe that it is purely a matter of negative
domestic investor sentiment that has stifled investment flows into the
bourse over the last couple of months, although in contrast, foreign
investors have been cherry picking investments especially in blue chip
counters. Consequently, we believe the biggest risk to the bourse now is
not one of fundamentals but that of negative domestic investor
sentiment that is denting performance and barring the market from
re-rating to higher levels. We advise domestic investors to break away
from the herd and select bluechip stocks with a medium to longer term
investment horizon,” DNH Financial added.

Threads merged.