Thursday, January 31, 2013

Foreign selling in COMBank triggers Rs. 1.4 outflow; locals step up buying

The Colombo stock market was yesterday boosted by strong play by foreigners and locals alike, raising turnover to a two-month high of Rs. 2.6 billion.

 With a foreign fund exiting Commercial Bank as part of profit taking, market saw a net outflow of Rs. 1.4 billion bringing the year-to-date figure to Rs. 1 billion.

Strategic interest by local investors in acquiring the Commercial Bank stake was welcomed whilst other foreign funds continued with their select buying, especially on LOLC (net inflow of Rs. 357 million on top of Rs. 254 million on Tuesday) and JKH. The Colombo Bourse overall snapped a three-day losing streak to end 0.43% higher. Commercial Bank saw a 2.2% stake or 17.7 million of its shares done at Rs. 103 each via three crossings in a deal worth Rs. 1.82 billion.

The seller was believed to be Janus, which has been shedding its stake in recent weeks to book profit.

 As at end September 2012 Janus had 33 million shares or a 4.24% stake. Some linked the sale to SBI Ven Holdings, which too has been selling in recent weeks. It had 29 million shares or a 3.7% stake by end September 2012.

 Market speculation was buyers to be Captain family and Indra Silva. The latter held 17.38 million shares or 2.2% by end September 2012, whilst for the Captains, who have stakes in HNB and Sampath, it is the first major buy in Commercial.

 Overall Commercial Bank saw 18.57 million shares traded for Rs. 1.9 billion, accounting for 71.5% of the day’s turnover.

 Whilst one foreign fund sold out, another stepped up buying. LOLC saw further foreign buying with a five million share block done at Rs. 71.50 each, marginally lower than Rs. 72.50 per share deal on 3.5 million shares on Tuesday. Foreign holding of the counter rose by 5,173,052 shares.

 Apart from these two major deals, accumulation in banking sector counters such as Hatton National Bank and DFCC was evident, while retailers were seen active in counters such as SMB Leasing, Renuka Agri Foods, Watawala Plantations, and Expolanka Holdings.

 Interest stayed in Royal Ceramics (+0.2%), having seen two blocks totalling 200,000 shares being transacted on-board at Rs. 99.1, before the counter secured a marginal gain at its close of Rs. 99.5. Interest was also evident in Piramal Glass, Lanka Orix Finance, and Brown & Company.

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