Bourse recovers some lost ground

Indices gain tidily though turnover below a billion

The Colombo bourse yesterday caught up some of the ground lost in the two previous days with all three indices moving up tidily on a turnover of Rs.941 million, down from the previous day’s Rs.1.22 billion, with the All Share Price Index gaining 52.83 points (0.90%), the Milanka up 69.35 points (1.26%) and S&P up 27.97 points (0.89%) with 175 gainers comfortably ahead of 57 losers while 76 counters closed flat.

The market was down during early trading following the trend of the previous two days but recovered by mid-day with both turnover and indices rising, brokers said.

"Renewed buying interest resulted in strong gains in both large caps and second tier speculative counters, which pushed the indices sharply higher. Turnover levels were led by trades on DIAL, JKH, and CTC, which collectively accounted for over 20% of turnover, inclusive of crossings," John Keells Stockbrokers said.

"Gainers outpaced losers with Kandy Hotels, SMB Leasing(X) and Ceylon Printers rising by 32.2%, 25.0% and 19.0% and offsetting losses in George Steuart, Lanka Walltiles and Hayleys Exports which declined by 18.6%, 7.0% and 6.3% respectively," DNH Financial said.

Yesterday’s top business generator was Ceylon Tobacco Company where an unusual 87,128 shares traded between Rs.700 and Rs.712 closing at Rs.700.20 contributing Rs.61 million to turnover.

There were two block trades during the day with 7 million Dialog changing hands at Rs.7.50 in a deal worth Rs.52.5 million while 100,000 JKH crossed at Rs.219 in a transaction worth Rs.21.9 million.

The big contributors to turnover were Nation Lanka Finance where nearly 3.5 million shares were traded contributing Rs.50.4 million business volume and JKH with over 0.2 million done on the floor and Lanka Hospitals with nearly 0.8 million shares traded.

Haycarb rose sharply to close Rs.15.80 up at Rs.183 following an announcement of the acquisition in Thailand of a coconut shell based activated carbon manufacturer.

Haycarb said in a Stock Exchange filing that this acquisition by Carbokarn, its 50% joint venture partner in Thailand, will increase group production by 10%.

Haycarb saw nearly 0.2 million shares done between Rs.175 and Rs.185 closing Rs.15.80 up at Rs.183 contributing Rs.32.1 million to turnover.

Nation Lanka closed 50 cents down at Rs.14.20 on nearly 3.5 million shares, JKH was a rupee up to close at Rs.219 on over 0.2 million shares done on the floor and Lanka Hospitals up Rs.2.40 to close at Rs.48.40 on nearly 0.8 million shares.

Dialog where two large parcels was part of over 3.8 million shares traded closed 30 cents up at Rs.7.70. Brokers said that retailers were active in this stock.

Kandy Hotels, generally an illiquid stock, gained Rs.2.90 to close at Rs.11.90 on 2.5 million shares while Browns Beach Hotel was up Rs.1.10 to close at Rs.29.90 on over 0.9 million shares. There has been recent interest in normally illiquid hotel stock, brokers said.

Other counters that showed volume included Vallibel One closing Rs.1.30 up at Rs.22.80 on a million shares and Central Investment and Finance closing flat at Rs.8 on nearly 2.8 million shares.

HNB (non-voting) gained 90 cents on nearly 0.2 million shares done between Rs.110 and Rs.115 contributing Rs.20.6 million to turnover.

"Despite the last few days’ profit taking, the Sri Lanka bourse is still the world’s best performer at 20.3% on a MoM basis comparing highly favourably amongst global peers. Even though the market’s recent rise is mainly attributable to retail buying rather than institutional or foreign interest, we still view market conditions as a healthy entry point for investors to cherry pick quality stocks on weakness and keeping in mind an investment horizon spanning the medium to longer term," DNH Financial said.

"Although Balance of Payments pressures are likely to continue on the back of high oil prices, Sri Lanka’s economic story still appears to be intact and will provide the necessary comfort to investors justifying the current market PE of 16X which appears relatively expensive compared to other frontier/emerging markets," it said.

source - www.ft.lk