Thursday, December 20, 2012

Brisk buying by foreigners before X’mas holidays

Foreigners are busy buying attractively-priced select Lankan equities before the onset of Christmas holidays.

 In the final full-week before Christmas, net foreign buying has amounted to Rs. 350 million, bringing the year-to-date figure to Rs. 37.5 billion.

Most of the foreign buying however had been of stakes held by peers who were exiting booking profit. For example, foreign fund Janus figured on the selling side of Commercial Bank but new emerging/frontier market funds grabbed the opportunity.

 Commercial Bank saw 1.85 million of its shares traded on Tuesday for Rs. 187 million. Yesterday too Commercial Bank saw 1.9 million of its shares traded for Rs. 194 million.

  Foreign investors’ darling JKH also saw Rs. 150 million worth of buying on Tuesday, whilst other foreign-to-foreign deals covered Dialog and Aitken Spence as well as Pan Asia Bank.

 Persistent foreign buying remains emphatic though most locals have so far failed to find strength from the record net foreign inflow. Some analysts said bullish sentiment by foreigners is despite the risks associated if any and various negativities some sceptics link to the Bourse, regulations and prospects for corporates in the economy.

 Overall foreign participation has been above 50% this week.

 The declining trend in Treasury Bill yield rates for the second consecutive week (see page 8) is likely to make equities more attractive for locals in the New Year.

 Some of the local institutional investors also continued to take profit. For example, Sri Lanka Insurance Corporation Life Fund was on the selling side of Sampath Bank, shedding Rs. 161 million worth of shares, whilst the bulk of the buying came from the Captain family. SLIC was also on the selling side of JKH this week.

 NSB, which began selling Chevron Lubricants last week, persisted in the act to book profit. It sold a further 250,000 LLUB shares for Rs. 50 million this week as well to a foreign fund.

 Commenting on yesterday’s market, NDB Stockbrokers said: “The Bourse continued its upward movement, heading into the Christmas holidays. Commercial Bank saw foreign interest with parcel trades boosting turnover. Additionally, Cargills and Bukit Darah saw institutional and high net worth interest.”

Lanka Securities said the market traded with mixed sentiments throughout the day although a few blue-chips lost ground.

 The ASI gained 4.87 points (+0.09%) to close at 5,512.66, the MPI lost 18.44 points (-0.37%) to close at 5,020.86, and the S&P SL20 Index lost 1.63 points (-0.05%) to close at 3,017.99. Turnover was Rs. 464 m.

“Commercial Bank continued to provide activity in the market, whilst turnover was dominated by blue-chips. Gains on Bukit Darah helped to prop up the indices as a private deal took place above the market price,” Lanka Securities added.

 Top contributors to turnover were Commercial Bank with Rs. 194.1 million, Cargills Ceylon with Rs. 56.2 million and Bukit Dharah with Rs. 52.5 million. Most active counters for the day were Lanka Milk Foods, Sampath Bank, and Vallibel One.

 Notable gainers for the day were Talawakele Plantations, up by 10% to close at Rs. 24.90, Huejay International, up by 9% to close at Rs. 79.80 and Ceylon Insurance, up by 8% to close at Rs. 79.

Notable losers for the day were Ceylon Leather Products – warrant (0013), down by 15% to close at Rs. 5.10, Tea Smallholder Factories down by 14% to close at Rs. 42.30 and Hapugastenna Plantations down by 10% to close at Rs. 38.60.

 The Banking, Finance and Insurance sector became the highest contributor to the market turnover (due to Commercial Bank and Sampath Bank) and the sector index dropped by 0.20%. The share price of Commercial Bank lost Rs. 1 (0.97%) to close at Rs. 102 while the share price of Sampath Bank increased by Rs. 0.10 (0.05%) to close at Rs. 200.10.

 The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Cargills Ceylon) and the sector index gained by 0.59%. The share price of Cargills Ceylon increased by Rs. 11 (7.69%) to close at Rs. 154. The share price of Bukit Darah dropped by Rs. 3 (0.45%) to close at Rs. 662 while the share price of PC Pharma dropped Rs. 0.30 (2.91%) to close at Rs. 10.

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