CSE Diary for 19.04.2012
The Colombo Bourse received a boost on the news of the lifting of the price band rule by the SEC. The benchmark index jumped 111 points to close at 5,518 heavily supported by the illiquid counters led by Ceylon Tobacco, Bukit Darah and Sri Lanka Telecom. The surge in the ASPI is the largest gain since 17.02.2012. The rise in the more liquid Milanka, however, was a modest 32 points to close at 4,939.
We advise investors to not to get excited on the sudden rallies which are likely to be short lived amidst the rising interest rates. We believe value seekers should give priority to higher dividend yielding counters as the rising interest rates may dim the prospects of capital gains in the short term.
As expected the most liquid blue-chip conglomerate John Keells Holdings topped the turnover list 296k shares changing hands as the counter fell -1.7% amidst selling pressure. The counter traded between LKR205.0 and LKR209.0 to finally close at LKR205.0.
Strong buying interest was recorded in the banking sector with Commercial Bank leading the way. Both the voting and non-voting share of the counter grabbed investor interest as each gained +4.0% and +5.1% to close at LKR105.9 and LKR84.1 respectively. Buying interest were witnessed in more banks consisting of Sampath Bank and Nations Trust Bank as both counters registered gains of 1.0% and 1.8%.
The highlight of the day was sharp price appreciation of the illiquid dividend play counters Nestle and Ceylon Tobacco as both counters recorded highest ever prices of LKR1,050.0 and LKR720 respectively. The counters closed with gains of 3.1% and 15.4% to reach LKR1,000.0 and LKR699.0 respectively.
European Stocks Rise for a Third Day: European stocks rose for the third time in four days as Spain met its target at a bond auction and amid speculation that China will cut the reserve ratio for its banks. U.S. index futures rose, while Asian shares declined. The Stoxx 600 increased 0.4 percent to 258.84 at 10:23 a.m. in London, paring an earlier rally of as much as 0.9 percent.
Oil Rises in London as Europe Recovery: Brent oil rose in London as a debt sale by Spain bolstered confidence in Europe’s recovery, countering concern that rising U.S. inventories will leave the market over-supplied. Crude for May delivery on the New York Mercantile Exchange was at $103.14 a barrel, up 47 cents.