New US fund enters JKH

    * Cash hungry SLIC sells 4.8 m shares in premier blue chip for Rs. 1.4 b
    * Foreigners remain bullish as net buying nears $ 4 b in five days;
    * Quick profit taking by locals drag Bourse down after two days of gain

Giving a fresh boost to the stock market, a new US fund has entered the country’s premier blue chip with it yesterday picking up a small but maiden stake of 0.7% for Rs. 1.46 billion.

This as well as few other select buying has pushed net foreign inflow to Colombo Bourse to Rs. 3.8 billion during the past few days.

Analysts said foreign funds were on the buying side of JKH and fresh round of net inflows augurs well for the Bourse. However they had sold Rs. 24.3 billion worth of shares net year to date.

Capitalising on foreign interest was Sri Lanka Insurance which via its General Fund sold an estimated 4.78 million shares of JKH at Rs. 301 each. In recent weeks, SLIC has been looking to liquidate some of its investments to raise cash to finance several of its key acquisitions outside the realm of insurance.

JKH overall saw 4.978 million of its shares trade generating a turnover of Rs. 1.5 billion, nearly half the day’s figure of Rs. 3.3 billion.

Deals on JKH were the only bright spot in an otherwise “back to bearish” market.

“Indices gained during early trading but changed the course to close on a low note. Retail selling pressure would surface from time to time with the broking houses required to reduce debtor levels,” NDB Stockbrokers said.

After two days of confident gains, the ASPI dipped marginally by near 0.4% whilst MPI shed 0.7%.
Diversified and Bank Finance & Insurance sectors were the highest contributors to the market turnover while both sector indices declined by 0.05% and 0.67% respectively.

Seylan Bank (Non-voting) also contributed significantly to the market turnover with a crossing of 780,400 shares at Rs. 52.50. The share price declined by Rs 1.20 (2.44%) and closed at Rs. 51.90. Foreign holding of the company increased by 121,400 shares.

Market also saw another four major crossings – 500,000 shares of Cargills (Ceylon) at Rs. 195, 928,705 shares of Tokyo Cement (Non-voting) at Rs. 35; 300,000 shares of Distilleries at Rs. 171 and 100,000 shares of Sampath Bank at Rs. 260.

Though the Bourse fell marginally yesterday it remains Asia’s best performer in 2010 with a gain of 93.1% ahead of second-ranked Indonesia’s 45.8%.

The bourse is trading at a forward price-to-earnings ratio of 19.9 compared with all-Asia’s 13.1 and global emerging markets’ 12.2, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 51.2, in between the lower and upper neutral limit of 30 and 70.

The bourse saw trading volume of 351.3 million shares on Thursday, against the average trading volume of 89.7 million and 49.6 million in the past five and 30 days respectively. The 90-day average volume of the bourse is 72.2 million.

FT Alert
Rupee closes weak
The rupee closed weaker at 111.33/36 a dollar from Wednesday’s 111.20/24 on heavy importer dollar demand, currency dealers said.

source - www.ft.lk