Jan 18, 2013 (LBT) - The Colombo bourse rushed up to a 20 point gain during the first hour of trading peaking at 5,895 points following which a gradual downward slope was observed resulting in the market closing flat for the day. The S&P SL20 journeyed on a volatile path and finally closed on a negative note with a dip of 10 points. Lanka Orix Leasing, Nation Lanka Finance and Sri Lanka Telecom were the main positive contributors to the index.
Following the dip in interest rates in treasury bills and bonds, retail activity has considerably improved in the market improving the volume and number of trades in the market. We believe market interest rates of deposits and lending would also adopt a similar trend during the next 3-4 months. This has triggered investor sentiment in the market. However, still activity remains at moderate level with investors entering the market on a small scale. We strongly advise our investors to rush into the fundamentally strong growth counters as it is still not too late though the market has gained almost 1000 points from its bottom. We believe the primary focus of the investors should be banking and finance sector as declining interest rates would improve their margins and allow opportunity for profits in the bill and bonds market.The country’s largest listed bank, Commercial Bank which has drawn considerable foreign interest in the past 12 months topped today’s turnover with further accumulation in the counter. The counter registered 3 crossings accounting for 1.7mn shares dealt at LKR104.5 and 105.0. The counter saw a couple of large blocks of 450k and 100k shares being traded onboard as well at LKR105.0. The counter closed for the day at the same price of LKR105.0. Hayleys was the only other counter to record a crossing which was 240k shares at LKR300.0. On-board trading on the counter was minute.
Investor interest persisted in Distilleries as the counter renewed its 52-week high price to LKR190.0. However following the gains in the last few days the counter noted some selling pressure amidst profit taking leading the counter to close the day on a negative note with a dip of 1.1% at LKR187.8. Its related company Lanka Milk Foods has also been among the counters accumulated by investors considering the 13% stake it holds in Distilleries. The counter also reached a new 52-week high price of LKR126 while it closed with a hefty gain of 4.2% at LKR125.0.Strong buying interest specially among the retail category was witnessed in 2 of the large Power and Energy company Lanka IOC and Laugfs Gas as the former touched a 52-week high LKR23.0. John Keells Holdings and Aitken Spence were also among the active counters for the day.
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