Sunday, January 29, 2012

Big block blue chip trades infuses welcome oxygen to CSE

The Colombo bourse rallied last week as high net worth investors traded large blocks of blue chip shares boosting retail investor confidence, Acuity Stockbrokers said in a research report yesterday.

The All Share Price Index gained 133 points (2.38%) while the Milanka was up 163.35 points (3.43%) on Friday on top of a less spectacular gain of 36.11 points (0.65%) on the All Share and 21.53 points (0.45%) on the Milanka the previous day.

Acuity said that the rally had been led by the banking and finance and diversified sectors which contributed 78.2% on Friday’s market turnover.

"We expect the positive market sentiment to gather momentum in the week ahead, supported by strong fourth quarter corporate earnings," the report said.

The big trades on Thursday comprised sales of large blocks of John Keells Holdings (JKH) by Mr. Sohli Captain and connected parties to foreign shareholders.

The Captains, who remain the biggest shareholders of JKH, were buying into Commercial Bank which also saw substantial blocks being sold by foreign shareholders to local buyers.

JKH last week posted a strong third quarter result for the current financial year with group attributable profit after-tax up 55% to Rs.2.73 billion. It was up 46% to Rs.5.68 billion in the nine months ended September 30, 2011.

Both revenue and profitability were up substantially with group revenues for the first nine months up 28% to Rs.54.27 billion.

The September financials indicated that JKH had done best in the leisure and transportation segments with leisure earnings topping Rs.1 billion before-tax during the nine months under review and transportation earning Rs.879 million pre-tax.

Financial services too had done well earning Rs.605 pre-tax during the 9-month period while consumer food and retail earned Rs.532 million with all segments doing substantially better than during the comparative period the previous year.

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