The Colombo Bourse yesterday produced a mini-rally with its value rising by Rs. 23 billion led by resurgence in blue chips and foreigners continuing to be net buyers.
The benchmark ASI gained by 1.27% and the blue chip MPI sharply by 3% whilst the S&P SL20 was up 1.45%. Despite speculated withdrawal of foreign investors over the possible exit of the regulator, net foreign inflow shot up to Rs. 144.47 million from Rs. 22 million on Monday. The year-to-date inflow also crossed the Rs. 26.5 billion mark. Trading in top blue chips John Keells Holdings, Commercial Bank and Dialog collectively accounted for 56% of the day’s total of Rs. 535 million.
Blue chips fuel gain
Contrary to misconceptions that junk or speculative stocks fuelled the rally yesterday, as per CSE data, five of the top blue chips contributed over 30% to yesterday’s gain in the All Share Index.
Stock % contribution Price Change to ASI gain
JKH 20.69 Rs. 9.40
SLT 5.66 Rs. 1.20
COMB 3.67 Rs. 1.50
CT Holdings 2.44 Rs. 5.10
Carsons 2.05 Rs. 4.00
Today’s market rally led a number of steady counters including our key buys, John Keells Holdings, Hatton National Bank (voting and non-voting), Aitken Spence Hotel Holdings, Sampath Bank, Commercial Bank (voting and non-voting), and Ceylon Tobacco to appreciate with considerable buying interest, which we take as a welcome sign. Nevertheless, speculative play also looked to raise its head, which is likely to trigger selling pressure warranting the run to be a short-lived one.
Hence, we take the opportunity to remind the investors to focus on the sound stocks, whilst balancing their portfolios with a higher allocation to attractive DY players (majority of the counters with expected sustainable earnings growth, produce attractive expected DYs at current low prices) – Softlogic Stockbrokers.
source - www.ft.lk
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