Friday, February 8, 2013

Mark Mobius's Best buy in Colombo - COMB

 01. Franklin Templeton buys Rs. 1 b worth of COMBank shares

Locals step into equities as most foreign funds take profit

By Nisthar Cassim

 JP Morgan Franklin Templeton Investment Funds is estimated to have invested Rs. 1 billion in buying into private sector industry giant, Commercial Bank shares by last week.

 Commercial Bank last week saw nearly 15 million of its shares or 2% stake traded for Rs. 1.5 billion and Daily FT learns Franklin Templeton figured as the biggest foreign buyer as several other relatively older foreign funds exited from the stock booking profit.

On Tuesday it bought slightly over Rs. 400 million worth of Commercial Bank shares whilst Wednesday it collected a further Rs. 381 million shares.

 In recent times, Franklin Templeton has been collecting Commercial Bank shares including a block worth Rs. 217 million in the previous week.

 Interest by Franklin Templeton is being viewed as a major boost to the Colombo Bourse, as it joins a set of foreign funds which have renewed interest on Lankan equities. Others include Deutsche Bank AG London and more recently Citigroup.

 Buying by Franklin Templeton also resulted in net reduction in foreign holding at Commercial Bank being limited to 6.5 million shares, though the bulk of the selling was by foreign funds such as SBI Ven Holdings and Janus.

 Several local institutions as well as high net worth investors too were zeroing on Commercial Bank last week.

 For example, Ravi Thambiayah-fame Renuka Hotels and connected parties bought Rs. 200 million worth of Commercial Bank shares, whilst the biggest player in the equity market, the Captains, were on the buying side too.

 Savings giant NSB too has been collecting Commercial Bank shares in addition to a host of insurance and investment funds.

 The market, which has provided 4% return so far in 2013, last week saw net foreign outflow of nearly Rs. 1 billion as foreign funds were either booking profit or reallocating their Sri Lankan portfolio.

 Nevertheless, several new funds are active on select stocks. For example, Mathews Asia Growth Fund was believed to have been the major buyer of Sampath Bank and LOLC, two stocks which saw net increase in foreign holdings according to Acuity Stockbrokers. Sampath saw a 0.64 million share-increase in net foreign holdings worth Rs. 137 million whilst LOLC saw 0.83 million shares worth Rs. 58.6 million.

 In both counters locals were the sellers. Nestl√©, which is a favourite of foreigners, drew Rs. 116 million worth net buying last week. Premier blue chip JKH, the most popular among foreigners, was relatively subdued with only 0.15 million shares of net buying. Other stocks which saw an increase in net foreign holding were Distilleries, Chevron, Dockyard, Hotel Sigiriya, and Dialog.

 A host of local insurance and investment funds including unit trust were also active on banking sector stocks and their basket comprised Commercial Bank, DFCC Bank, and NDB. Insurance funds were also active collecting available quantities of Carson Cumberbatch and Aitken Spence Hotels.

 Nippon Coke and Engineering of Japan sold Rs. 30 million shares of Tokyo Cement with major local shareholder Gnanam-family linked South Asian Investments buying the block, as the case has been in recent weeks.

source - - 28 01 2013

02 .Mobius’ fund invests a further Rs. 846 m into COMBank, Captains enters with Rs. 1 b

commercial bank draws heavy foreign and local play; new foreign funds enter JKH as two top blue chips see Rs. 6.64 b worth of shares traded last week

 Two top blue chips – Commercial Bank and JKH – triggered a massive Rs. 6.64 billion worth of share trading last week, with active play by foreign funds and local high net worth investors as well as funds.

As exclusively reported by the Daily FT last week, investment guru Mark Mobius-linked Franklin Templeton fund further focused on the country’s leading private sector bank, COMB, collecting a fresh stake of 8.2 million shares worth Rs. 846 million on Thursday. This was on top of investing around Rs. 1 billion in the previous weeks.

 Growing confidence and buying by Templeton is amidst large-scale selling by several other relatively older (in terms of shareholding) foreign funds booking profit. SBI Venture Holdings, Janus, and Saudi Arabia’s Al Meshaal as well as Aberdeen Institutional Commingled Funds were on the selling side last week as 36 million shares or a 4.6% stake of COMB traded for Rs. 3.72 billion.

 Given the positive re-rating for banking sector stocks, several local high net worth investors and funds stepped up their buying into COMB. Leading the pack was Sohli Captain and connected parties, who are estimated to have invested around Rs. 1 billion on a net basis last week in COMB.

 A few blocks were sold as well as part of trading. The biggest block they bought was on Wednesday amounting to 8 million shares or 1% for Rs. 825 million, followed by a further 2.5 million shares for Rs. 260 million on Thursday.


 Existing shareholder Indra Silva also picked up 8.2 million COMB shares for Rs. 845 million.
Popular high net worth investor Nimal Perera also joined in, collecting nearly Rs. 100 million worth of COMB shares.

 Among the plethora of institutional investors and funds buying into COMB was Capital Trust, unit trust funds, and corporates. Foreign holding in COMB declined to 31.4% last week from 34.7% in the previous week as 25.3 million worth of shares were sold by non-nationals.

 Apart from COMB, Captains were also buying into Sampath Bank, apart from others, as the private sector saw Rs. 483 million worth or 2.2 million shares traded.

 Captains’ heavy play continued on their favourite stock, JKH, in which they are the largest shareholder. The premier blue chip saw nearly 13 million of its shares traded for Rs. 2.9 billion. The Daily FT learns several new foreign funds have zeroed in on JKH as it saw nearly six million worth of shares bought by non-nationals, bringing the total foreign holding in JKH to over 55%.

 The Captains were largely on the selling side of JKH last week, whilst an Aberdeen fund too sold heavily, as in the case of select other stocks, whilst another Aberdeen fund bought into JKH. Several State funds such as SLIC and NSB were on the selling side, booking profits, as was Renuka Hotels Group.

 LOLC, which emerged as the third most traded stock last week with nine million shares worth Rs. 641 million changing hands, saw net foreign buying of 8.8 million worth Rs. 600 million. Mathews Asia Growth Fund as exclusively reported by the Daily FT continued its buying into LOLC, whilst market talk was that another new fund was also buying in addition to Sampath Bank, which saw a net foreign holding increase of 0.96 million shares worth Rs. 213 million. Institutional and high net worth investors were among major sellers of Sampath to foreign funds.

 Overall foreign investors closed the week in a net selling position – albeit lower than the previous week – of Rs. 0.42 billion relative to the previous week’s net selling position of Rs. 0.93 billion. Year-to-date net outflow was Rs. 0.9 billion, whilst the market has gained by 2.78%.

 Last week saw indices gliding down while encountering strong foreign participation, depicting a notable number of off-market deals. Fifty-two crossings worth Rs. 5.7 billion were recorded, contributing 62% to the turnover level, with the majority of the deals surrounding selected blue chips, denoting unrelenting interest in fundamentals. Thursday’s trading alone witnessed a turnover of Rs. 3.4 billion, the highest since 19 November 2012, with prime focus on Commercial Bank.

 The benchmark index moved on a rather stagnant path, fluctuating between 5,886.59 points and 5,799.45 points, before dipping 78 points WoW at its close of 5799.69 points. However, the S&P SL20 index, backed by gains in steady counters, secured a gain of six points WoW at 3196.81.

source - - 05 02 2013

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