Friday, July 29, 2011

Bourse gathers strength; Market Cap up Rs. 53 b

The Colombo Bourse achieved a second day of positive growth boosting market capitalisation by Rs. 53 billion thanks to retail as well as select institutional buying.

Whilst recovery on Wednesday appeared fragile with ASI up by only near 1%, yesterday it gained by over 2%. Market capitalisation grew by Rs. 53 billion to Rs. 2,376 billion as opposed to 9 billion the previous day. During the six market days ending Tuesday, Bourse had lost Rs. 121 billion in value.

Whilst sentiments were better, activity levels were relatively low with a turnover of only Rs. 1.5 billion, down from Rs. 1.96 billion on Tuesday.

“Indices gained gradually to close in green today amidst interest witnessed in finance sector counters. Increased retail participation saw the indices gaining its lost ground. All the sector indices gained today,” NDB Stockbrokers said.

Banks, Finance & Insurance sector was the main contributor to the market turnover (due to Swarnamahal Financial Services), while the sector index increased by 2.34%. Swarnamahal Financial Services was the main contributor to the market turnover. The share price decreased by Rs. 13.10 (10.46%) and closed at Rs. 112.

Diversified sector also contributed significantly to the market turnover (due to Softlogic Holdings). The sector index decreased 1.88%. The share price of Softlogic Holdings increased by Rs. 1.20 (5.04%) and closed at Rs. 25.

Arrenga Capital said the recovery path that the bourse took during the initial hours of trading stabilised with significant buying interest emerging during the latter hours of trading.

The gains made in most high index counters such as Richard Pieris, Sampath Bank, DFCC Bank, John Keells Holdings and Commercial Bank assisted the ASPI to register the 148 point gain. The solid +100 points gain recorded was after a lapse of nearly two months when the market registered a gain of 103.8 points back in May 2011. Following the sharp dip in the market in the previous weeks, many investors were found picking on selected counters. With the positive trend seen in the past couple of days, the market sustained its technical estimation of support levels between 6,500- 6,400 point range.

 Swarnamahal Financial Services saw around 1.1 mn shares being traded today with the share touching an intra-day high of LKR128.0 at open but closed at LKR112.0 for the day. Renewed investor participation was evident in Guardian Capital Partners, which led the counter top the day’s price gainers’ list with an appreciation of 23.05%. Retail and institutional participation was evident in Softlogic Holdings whilst foreign selling in National Development Bank was absorbed in by local institutions. Institutional play was visible in Commercial Bank and Aitken Spence.

Following the release of strong earnings by John Keells Holdings (up 35.3% YoY to LKR1.36 bn in 1QFY12) and Sampath Bank (up 52.21% YoY to LKR1.1 bn in 2QFY11) today, both the counters saw active investor involvement registering 1.34% and 4.74% price gains.

Furthermore, investor interest re-emerged in the poultry sector counters with Ceylon Grain Elevators, Three Acre Farms and Bairaha Farms Limited registering gains of 14.6%, 21.99% and 8.3% respectively.

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