ECONOMYNEXT – Sri Lanka stocks closed 0.4 percent higher on Monday as domestic investors joined foreign investors in picking value counters, brokers said.
The Colombo All Share index gained 25.78 points to close at 6,540.51 on a turnover of just over 1,735 billion rupees.
John Keells Holdings closed up 3 percent at 165 rupees, Nestle was up 3.4 percent to 1,697.70 rupees, Lion Brewery was up 4.6% percent to 564.70 rupees and Lanka Orix Leasing up 2.3 percent to 122.80 rupees.
The S&P 20 index of more liquid stocks closed 0.7 percent higher, gaining 26.12 points to close at 3,810.05.
"Foreign investments in stocks like John Keells, Sampath Bank (up 0.3 percent to 329 rupees), HNB (unchanged at 255 rupees) and Melstacorp (down 0.7 percent to 60.20 rupees) weighed positively on the All Share Index," ," says Prasanna Chandrasekera, a director at Softlogic Stockbrokers.
"This is largely due to global funds finding value in emerging markets, including Sri Lanka
The MSCI Emerging Market index gained 3.4 percent last week, the best start to a year since 2006. In comparison, Colombo’s All Share index has gained 2.69 percent and the S&P 20 gaining 3.77 percent.
Foreigners sold one billion rupees of stock on Monday, but purchased were higher by 33.8 million rupees.
Net foreign buying topped 32 million rupees in ACL Cables (up 1.1 percent to 44 rupees). Net foreign selling
topped three million rupees in Commercial Bank (up 0.4 percent to 141 rupees).
“I believe that foreign selling has largely been absorbed and going forward, there’ll be more investment coming in,” Chandrasekera says.
Foreign investors were seen selling to other foreigners, and also to locals.
"We’re also seeing domestic non-institutional investors such as high-net worth individuals becoming more active," Chandrasekera says. "For instance, they’re buying John Keells shares from foreign investors."
Ceylon Tea Brokers (up 2.3 percent to 4.50 rupees) was the heaviest traded stock in terms of volume with nearly 93 million shares changing hands with the parent company Capital Alliance divesting a 81 percent stake in the company at 4.30 rupees a share, brokers said.
Negotiated trades, or crossings, accounted for 86 percent of market turnover with four crossings recorded in Colombo Tea Brokers, three crossings in Commercial Bank, two in Sampath Bank and one each in Melstacorp, and People’s Leasing (unchanged at 17 rupees) and HNB, Asia Securities, a stockbroker firm, said (COLOMBO, January 08, 2018)