The bull run on the Colombo bourse ended yesterday with both indices down fairly sharply but turnover still topping the billion rupee mark with profit taking clearly evident, brokers said.
Turnover at Rs.1.84 billion was up from the previous day’s Rs.1.82 billion while the All Share Price Index lost 58.25 points (0.98%), the Milanka was down 87.45 points (1.55%) and S&P dipped 32.97 points (1.03%) with 197 losers leaving 63 gainers trailing while 46 counters closed flat.
Asked whether the carnival was over, a broker said that need not be the case at all as there was potential upside with buying interest in blue chips at lower price levels.
``The indices fell sharply on profit taking across the board amid healthy activity levels centered on banking, finance, hotel and manufacturing counters," John Keells Stock brokers said in a market report.
Foreigners remained net buyers with purchases at Rs. 295.3 million and sales at Rs. 120.2 mn. with a net inflow of Rs. 175.1 mn.
There were no block trades yesterday with the big turnover generators being Nation Lanka Finance which contributed the day’s top turnover of Rs.174.1 million, JKH (Rs.100.6 million) and Kalpitiya Beach Resort (Rs.92.7 million).
Substantial contributions also came from Central Investment and Finance (Rs.90.2 million), Sampath (Rs.76.4 million), Browns Beach Hotel (Rs.70.8 million), HNB (Rs.64.2 million) and Commercial Bank voting (Rs.60.7 million).
Among the most traded blue chips, JKH closed Rs.2.40 down at Rs.218 with nearly 0.5 million shares trading between Rs.215 and Rs.219.50 while Sampath closed a rupee down at Rs.214 with 0.4 million shares done between Rs.210 and Rs.215.30.
HNB (non-voting) closed 20 cents up at Rs.114.50 with nearly 0.6 million shares done between Rs.112 and Rs.116 while Commercial Bank (voting) closed Rs.1.90 down at Rs.115 on over 0.5 million shares done between Rs.114.60 and Rs.117.
Amng less pricey stock highly traded, Nation Lanka Finance closed 70 cents up at Rs.14.90 on over 11.4 million shares, Kalpitiya Beach was down 40 cents to close at Rs.9 on over 9.7 million shares and Central Investments and Finance up Rs.3 to close at Rs.10.90 on 8.8 million shares.
Brokers said that there was interest on blue chips at lower price levels and expected the market to regain momentum once the profit taking cycle ended.
"The turnover level indicates that there is liquidity," a broker said.
They also remarked on yesterday’s news that a Chinese company had struck a multi million deal with Mobitel during the ongoing visit here of the Chairman of the Standing Committee of the National People’s Congress of China.
"A big deal like that will be good for SLT,’’ a broker said. ``No announcements of other deals in the pipeline have yet been made but if they do come, it will be good for the market."
"While the current momentum in the bourse is certainly encouraging, investors may question the rationality of investing in Sri Lankan equities at current levels given the market’s sharp ascent over the last few weeks making it the world’s best performing market during the month, up20.2% MoM in dollar terms," DNH Financial said.
"We take however a more realistic view on the belief that current valuations on a PEG basis are still attractive on a highly selective basis. Fundamental investors may be benefited in the medium to longer term as valuation metrics display more dispersion to appropriately reflect varying coporate growth prospects thereby allowing investors to select and build a robust portfolio of quality stocks before stock mis-pricings are corrected and valuations rerated to market multiples," is said.
George Steuart Finance continued to experience unusual price movements with the share gaining 42.93 percent, up Rs. 309.10 to close at Rs. 1,080 with as little as 173 shares changing hands during the day.
"The market has corrected from resistance area of 6,000 as profit taking is emerging at this zone. The market has retraced the Fibonacci retracement level of 38.2% of the fall from Feb 2011 and is likely to go into a sideways consolidation and even correct from current levels. If the Index is able to move above the resistance zone of 6,000 then it can target 6,150 and above. On the downside 5,750 will provide good support to the bourse," Bartleet Religare Securities said.