Noting that the talk of the Bourse over the past few weeks was the disposal of large holdings in Commercial Bank (Voting share), the broking firm said equity stakes in Commercial Bank were believed to be sold to book profits by Janus Capital Management, a US-based fund, where the fund would have gained through its long-term investment made since end of 2009.
“These moves have also increased liquidity of those counters and provided an opportunity for large investors to pick large quantities in the fundamentally-strong blue chip counter,” Asia said.
It said another convincing factor had been the foreign holding of John Keells Holdings, which had continued to increase backed by the company’s future prospects.
“In addition, foreign buying was also evident in several blue chip counters over the past few months. This has also drawn the attention of local institutional investors towards the Bourse. On the back of these developments, local institutional investors have also begun to be active in the market, keeping an end to the dismal moves made by them during 2012,” Asia said.
However, the broking firm said retail investors’ contribution to the market continues to be lacklustre. “This can be possibly due to the drained liquidity of the retail investors, inability to regain confidence due to past losses, short-term focus, and relatively high stable returns from fixed income securities. Therefore, we advice investors to focus on shares that are trading at attractive valuations with a longer time horizon to maximise their gains,” Asia Wealth added.