MARKETS

Foreign investors boost bourse

The four day week at Colombo bourse ended with slipping indices. ASPI shed 46.9 points down by 0.61 percent to end at 7,664.72 while MPI dropped by 139.93 points to close at 7,029.42. The weekly turnover clocked at Rs 15.28 billion with major contribution of Rs 7.68 billion coming in towards the close of the week. The daily average turnover was strengthened to Rs 3.82 billion as against Rs 2.54 billion of the previous week. Healthcare, Banking and Manufacturing were the driving sectors for the market turnover. The healthcare segment added 31.04 percent to the total turnover with Rs 4.74 billion while Banking Finance and Insurance and Manufacturing shared 15.91 percent and 13.87 percent in weekly turnover with Rs 2.4 billion and Rs 2.12 billion respectively.

Lanka Hospitals rallied high turnover in Health sector with 30.19 percent share amounting to Rs 4.6 billion. Banking sector was supported by Commercial and Sampath Bank while Grain Elevators and Piramal Glass were the counters that added to the Manufacturing sector. Healthcare ruled the market volumes with 29.27 percent share while Banking and Manufacturing sectors stood at 23.25 percent and 13.2 percent of the total volumes. Investment Trust index reflected a positive week on week change of 5,140.86 points. Market capitalization was recorded at Rs 2.56 trillion at the close of the week.

Lanka Hospitals topped the market price this week closing at Rs 51.80 witnessing an increase of 37 percent as compared to previous week. The increased price was on account of strategic foreign buying. Capital Development and Investment Company noted a climb of 36 percent closing at Rs 225 compared to Rs 165 in the previous week.

Commercial Development closed the week at Rs 78.70 reporting a rise of 33 percent, generating a turnover of Rs 3.2 million.

Top loser for the week was Eastern Merchant closing at Rs 600 recording a dip of 21 percent in comparison with last week. Colombo Pharmacy closed at Rs 3,080 accounting a decline of 19 percent. Morisons (Non Voting and Voting) and Sinhaputhra Finance reported a decline of 18 percent, 17 percent and 15 percent respectively.

After a long haul of three months substantial foreign buying was witnessed in the bourse. The weekly inflow was recorded at Rs 4.7 billion as against selling of Rs 1.28 billion making the net foreign buying at Rs 3.4 billion.

The big chunk of foreign buying was observed in Lanka Hospitals where Fortis Healthcare bought 28.6 percent stake of Distilleries. More foreign participation is indicated in the market by way of investment to the tune of Rs 2 billion via private placement route by three UK based funds in the equity of CT Holdings.

Healthcare segment topped the weekly volume charts with Lanka Hospitals and Nawaloka contributing 21 percent and 8 percent to total volumes. The aggregate volumes for the week for Lanka Hospitals and Nawaloka were marked at 76 million and 29 million shares respectively. The other scrips that drive the volumes were Piramal Glass, Laugfs, SMB Leasing (Voting and Non voting) and Dialog.

Activity level at the Colombo bourse was regained towards the end of the week resulting in healthy rise in turnover and volumes.

The retailers continued to dominate the market and profit taking was noted across several counters. The market bounced back with renewed foreign interest as witnessed in the week's highlight of foreign investment in healthcare stock and also likely entry of foreign funds through private placement route. We expect the positive drive to persist in the coming week with interest in counters relating to key growth sectors.

Exports record highest ever monthly value in December

Both exports and imports recorded the highest ever monthly values in December 2010 the Central Bank of Sri Lanka said last Saturday.

Earnings from exports increased by 34 percent, year-on-year, to US $ 968 million and expenditure on imports rose by 30.8 percent to US $ 1,429 million. The cumulative earnings from exports increased by 17.3 percent to US $ 8,307 million during the year 2010 recording the highest annual value so far in the history and the cumulative expenditure on imports increased by 32.4 percent to US $ 13,512 million.

Accordingly, the trade deficit expanded to US $ 5,205 million in 2010 from US $ 3,122 million in 2009.

The largest contribution to the growth in exports in December was from the industrial sector, led by significant increases in exports of textiles and garments, food and beverages and rubber products. Earnings from garment exports to the EU and the USA increased by 33.9 percent and 31.4 percent, respectively, in December 2010. Exports of food, beverages and tobacco products increased by 74.3 percent, year-on-year, mainly due to higher earnings recorded by exports of fruits, vegetables and animal fodder. Rubber product exports consisted mainly of new pneumatic tyres and articles of apparel and clothing accessories (mainly gloves).

However, earnings from machinery and equipment and the diamonds and jewellery exports recorded year-on-year declines in December 2010. Earnings from agricultural exports increased in December 2010, reflecting a healthy growth in all major sub sectors, mainly due to higher prices recorded by major export crops in the international market.

The average export prices of tea and rubber continued to remain high at US $ 4.56 per kg and US $ 4.26 per kg, respectively, in December 2010. Earnings from minor agricultural exports increased by 28.8 percent to US $ 30 million in December, 2010 mainly due to significant increases recorded in the export volumes of cocoa, essential oils, cashew nuts and cardamoms.

Expenditure on imports of intermediate goods increased in December 2010, led by higher expenditure incurred on petroleum imports. The average import price of crude oil increased by 16.5 percent to US $ 90.37 per barrel in December 2010. Textile imports also increased substantially in December 2010, indicating a better outlook for the garment industry.

The expenditure on fertilizer imports increased by 119.4 percent to US $ 29 million reflecting higher import volumes due to the extended acreage cultivated in the Northern and the Eastern provinces and extension of fertilizer support scheme to coconut cultivations. Import expenditure on food and drink increased in December 2010 mainly due to higher food prices in the international market. Expenditure on non food consumer import category also increased mainly due to higher imports of motor vehicles. All categories of investment goods imports increased in December 2010.

During 2010, workers' remittances increased by 23.6 percent to US $ 4,116 million over that of 2009. The gross official reserves continued to remain above the targeted level and stood at US $ 6.6 billion by end January, 2011 without Asian Clearing Union (ACU) balances. Based on the previous 12-month average expenditure on imports of US $ 1,133 million per month, the gross official reserves without ACU balances, were equivalent to 5.9 months of imports.