* New fund buys 50 m shares of telecom giant for Rs. 450 m; year-to-date net inflows nears Rs. 23 b mark
* Browns major seller along with Sri Lanka Insurance Corp
* Dip in interest rates improve investor sentiment
In an apparent vote of confidence, a new foreign fund yesterday bought in to telecom leader Dialog Axiata, infusing Rs. 450 million net to foreign inflows via the Colombo stock market.
Dialog saw 56.94 million of its shares traded for Rs. 512.4 million, of which a block of 56.9 million shares was done at Rs. 9 each. Net foreign holding of Dialog rose by 50 million shares (around a 0.6% stake), bringing the total to a high 92.33%.
The buyer is a new fund whilst last week Dialog saw net foreign buying of over 10 million on top of 26 million shares worth Rs. 225 million in the week ended on 4 October.
Major seller was Browns Investments Plc which held 41 million shares or 0.5%, whilst Sri Lanka Insurance was also on the selling side, same as last week. Browns Investments was third largest local shareholder of Dialog behind EPF and Sri Lanka Insurance.
Buying on Dialog boosted year-to-date net foreign inflows to close to the Rs. 23 billion mark, on top of Rs. 39 billion last year, reinforcing the fact that the Colombo Bourse remains attractive for discerning investors.
Aided by a dip in interest rates and a pickup in sentiments, the market bounced back yesterday by 28 points whilst turnover was Rs. 942 million. Noting that the market picked up as interest rates fell further, NDB Stockbrokers said: “The Bourse managed to record gains after posting losses for two consecutive days.”
The Government’s six-month Treasury Bill yield fell 11 basis points to 9.00% whilst the 12-month T-Bill yield fell 19 basis points to 9.83%.
Softlogic Stockbrokers said the ASPI was hovering around important technical level 5,900 points. “The Bourse denoted an upward trend till the mid trading session and witnessed a sharp retracement followed by a pull back. ASPI settled with a gain of 28 points at 5,934.41. Gains recorded in Lanka Orix Leasing (+8.3%), Ceylon Tobacco Company (+1.5%) and Nestle Lanka (+1.4%) weighted positively on the index. S&PSL20 however ended marginally positive with a gain of 5 points at 3,265.82,” it added.
It said Lanka Orix Leasing Company denoted notable onboard interest backed by a single trade which amounted to 2.9 million shares at Rs. 65 each. It closed at Rs. 65 with an intra-day gain of 8.3%. NDB linked high net worth activity on LOLC.
The value counter Lanka IOC also displayed strong buying pressure with strong turnover, the largest being the 100,000 onboard share transaction at Rs. 27 each. LIOC ended at an intra-day high of Rs. 27.5 with a gain of 3.8%. The counter trades at a trailing PER of 3.6x, reaching a strong technical resistance at around Rs. 28.4 Softlogic said.
Retail investor interest was heavy on PC House with several large onboard blocks traded and Touchwood Investments and Lanka Century Investments.
Lanka Securities said Access Engineering (Rs. 23.00,+2.2%), Textured Jersey (Rs. 15.70,-0.6%) and Seylan Merchant Bank non-voting (Rs. 0.50,+25%) reached 52-week high prices, while Tess Agro (Rs. 1.70,-5.6%), Piramal Glass (Rs. 5.00,-2.0%) and Dipped Products (Rs. 90.00,-6.3%) reached 52-week low prices during the day.
Market analysts linked the decline in Dipped Products to rising loss over the continued closure of its Venigros factory in Weliweriya, as reported by the Daily FT yesterday.
LOLC Securities said the Bourse turned around positively with the active participation of foreign and local investors. It noted gainers to losers ratio stood at 75/93 level. Lanka Securities added that the cash map was closed at 73%.
First Capital Equities said with 3Q2013 results trickling into the market, the Bourse is expected to inch upwards with the expectation that bluechip counters may report firm earnings growth.
“With several of these stocks currently trading on attractive valuations, we see little excuse for bottom-up investors to enter the market and advise them to however restrict their exposure to quality positions. We believe the window to invest is now open for those willing to choose an alpha driven approach. In this respect, we wish to emphasise that stock selectivity will determine the winners from the losers,” First Capital Equities added.
Providing welcome news to investors seeking after dividend yield, Commercial Bank yesterday declared an interim dividend of Rs. 1.50 per share.