Geneva triggers foreign exit from CSE?

[SrirangaVeteran]

Net foreign outflows on the Colombo bourse last week had hit a seven-week high with some analysts attributing the foreign exit as a reaction to the UNHRC decision on Sri Lanka in Geneva on Thursday.

"Foreign sales on Friday rose sharply to Rs.2.9 billion, the highest outflow in a single day since February 6, 2014," the Weekly Stock Market Report from Acuity Stockbrokers said.

"Net foreign outflows from equities consequently rose to a 7-week high, helping extend the bourse’s year-to-date outflow position to Rs.6.99 billion."

This compared with a net foreign inflow of Rs.22.8 billion for the comparative period last year.

JKH, described as the blue chip that was the foreign investor favourite, bore the brunt of the sell-off, the report noted. But by close of trading both the ordinary shares and warrants (W0022) had gained 2.15% and 5.74% respectively.

"The ASPI’s failed to break the key 6,000 point resistance barrier due to selling pressure and profit taking in selected counters this week,’’ the report said.

"Nevertheless, the final decision on the long-awaited UNHRC vote subdued some of the volatility that has dominated markets in the run up to the meeting."

Both the ASPI and S&P SL20 closed the week in the green with the All Share Price Index gaining 34.30 points (0.58%) and S&P SL20 up 32.65 points (1.01%). The ASPI was up 0.58% week-on-week and S&P SL20 up 1.01%.

JKH was the highest contributor to the week’s turnover accounting for 52.54% of the total of Rs.3.3 billion as a result of heavy foreign selling of the counter.

Crossings on NDB on Thursday saw this stock post a turnover of Rs.1.29 billion to account 25.53% of the total while Janashakthi ran third with a turnover value of Rs.218.13 million accounting for 3.47% of the total.

John Keells Stock brokers said in its Stock Market Weekly that the ASPI had traded within a narrow range over the week with activity levels driven on Friday by large trades in JKH and NDB accounting for 73% of the week’s turnover.

Foreign participation picked up on the selling side over the week recording a net outflow of Rs.2.8 billion, JKSB said.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=100705

[SrirangaVeteran]

The Colombo Stock Exchange on Friday recorded an outflow of 2.7 billion rupees with a foreign fund selling its shares in John Keells Holdings, a blue chip company. The fund divested of its 12.5 million shares in JKH. The outflow led to speculation that foreign investors were exiting the market due to the passing of a resolution on Sri Lanka at the UN Human Rights Council (UNHRC) in Geneva on Thursday. Some analysts were quoted as saying that investors were “worried about the economic impact and growth due to the resolution”.

Several other independent analysts said, however, that the sale of JKH shares was unlikely to have been tied to any actions at the UNHRC. They said it was probable that the Janus Capital Group had divested of its shares in JKH — and that the US-headquartered firm had been looking to sell for several months. “It has nothing to do with the resolution,” said one analyst, requesting anonymity. “Pretty much what happened to Janus yesterday was that it found a buyer.”

“Friday’s outflows were attributable to one share,” said another independent analyst. “It was not by any means widespread or endemic to the whole market. The anecdotal evidence is that Janus sold its shares. If it is, indeed, Janus, it had been looking to sell its stake in JKH for some time and the outflow cannot be connected to the UNHRC resolution.”

“It was a coincidence that the deal was closed on Friday,” he continued. “One share, one fund, should not be taken as a reflection of broader sentiment.

It was only a day since the resolution was passed and, to be honest, the result at the UNHRC should not have come as a surprise.”“Most foreigners investing in Sri Lanka are aware of what is going on and what has been expected,” this analyst stressed. “I don’t think it changes their views. Those who are going to invest will invest. Those who are going to sell will sell and those who are buying will continue to buy.”
http://www.sundaytimes.lk/140330/news/major-outflow-at-stock-market-but-geneva-connection-ruled-out-91050.html

[cseinvestor]

How ignorant can these analysts get? What are there qualification ? 1 no common sense.

If a fund want to exit, can they find a buyer for around Rs 3 billion in one day ?

Can 1 fund exiting 1 share be called mass market exit due to UNHCR?

If they exited 10 companies then atleast there is reason .

It is obviously this JKH sale was planned and probably the same fund who exited JKH before had a deal with Captains. Maybe they have more to sell which they bought dirt cheap many year ago or over the right issues.

Why does UNHCR resolution have impact to economy? We knew the outcome. It is clear there are no economic sanctions also.

Lot of Bull shit is going on to find excuses so these analysts look smart ( which we know they are not) .

If the market turns soon and there is an inflow , they will say the opposite.

The fact remains ASI did no drop massively below 6000 as some people expected.

[First Guy]

They should mention who these "some" analysts are.

[dhanurrox]

Lol tomorrow same people may say election win has boosted market.
Oh these newspapers,articles and "Some analysts"

[sereneTop contributor]

Whatever it is a very bad coincidence if not pre-planned.Yep there is a strong case that finding a Buyer of that magnitude at this date.It is a very optimistic thing to be considered.   

[NuinthTop contributor]

How ignorant can these analysts get?  What are there qualification ? 1 no common sense.

If a fund want to exit,  can they  find a buyer for around  Rs 3 billion  in one day ?  

Can 1 fund exiting 1 share be called mass market exit due to UNHCR?  

If  they exited 10 companies  then atleast there is reason .

It is obviously this JKH sale was planned and probably the same fund who exited JKH before had a deal with Captains. Maybe they have more to sell  which they bought  dirt cheap many year ago or over the right issues.

Why does UNHCR  resolution have impact to economy? We knew the outcome.   It is clear there are no economic sanctions also.  

Lot of Bull shit  is going on to find excuses so these analysts look smart ( which we know they are not) .

If the market turns soon and there is  an inflow , they will say  the opposite.

The fact remains ASI did no drop massively below 6000  as some people expected.

Thx Red for update.

Agree with you cseinvestor. All of us knew UNHRC outcome. If this is due to UNHRC issue, this deal should come 1-2 weeks ago. This is massive 3 billion deal. How it come within a day. Other thing buyer should not be crazy.

For me, I'm thinking other way. May be local investor bought this qty due to coming opportunity ( may be short term or long term). Who knows sometimes this may be same business partners/Group share deal according to their hidden agenda.