HNWIs, local institutions collecting blue chips
The Colombo share market has seen many high net worth individuals (HNWIs) and local institutional investors actively back in the game.
With foreigners fleeing the market, these HNWIs have been collecting mini blue chips with some entering the first 10 shareholders of those companies.
Some of the big names which have been very active in the market over the past month are Harry Jayawardena, Rusi Captain, Ravi Thambiayah, Anwar Jafferjee, Nimal Perera, Carsons Group, Sri Lanka Insurance Company (SLIC) and the Employees Provident Fund (EPF).
LOLC saw net foreign selling of 6.17 million shares for Rs. 732.6 million – mostly by foreign fund Matthews – on Monday as locals – Mr. Captain and Mr. Perera picked up some quantities. Monday saw 7.9 million LOLC shares traded for Rs. 927 million accounting for 55 per cent of the turnover.
Some of the most prominent sales happened during mid-May when the Colombo Stock Exchange (CSE) reopened after the 51-day shutdown. A day after CSE resumed trading 6 per cent of Commercial Bank, which was one of the key go-to stocks by foreign investors was sold mainly by Ntasian Discovery Master Fund (which had a 3.85 per cent stake as at 31 March 2020) and T. Rowe New Asia Fund (which had a 1.53 per cent stake as at 31 March 2020). Analysts said that foreigners were selling before the pandemic induced flee from the CSE. Foreign investors were net sellers in 2019, with Rs. 11.8 billion in net outflows as against a net outflow of Rs. 23.2 billion in 2018.
T. Rowe New Asia Fund was selling Commercial shares in late 2019. Stock exchange data show majority of the shares were picked up by Sri Lankan institutions led by David Pieris Group related companies, EW Balasooriya Group-related parties and connected parties to Indra Traders.
Mathews’ funds were big sellers all along in many shares they held at the CSE. Matthews Emerging Asia Fund slightly reduced stake in 4Q20 in Expolanka (2.9 million shares). In late May there was net foreign selling of 64,098,392 shares in Expolanka, data showed. The main seller in Ceylon Cold Stores PLC and in Teejay Lanka PLC (TJL) in 4Q was Matthews Emerging Asia Fund. Norges Bank also reduced stake in TJL quarter on quarter to 17,200,229 shares as at end 4Q20. Main seller of Sampath in 1Q2020 was Matthews Emerging Asia Fund which retained 8.8 million shares as the eighth top shareholder, with another 21.9 million shares in Matthews Asia Growth Fund. SLIC was another big buyer of Sampath during this quarter.
Ceylon Grain Elevators PLC saw net foreign selling of 860,707 shares on June 12. Norges Bank reduced stake in Lion Brewery PLC sharply during the fourth quarter but another foreign fund, Allan Gray 2,157,031 shares (2.70 per cent) as at March 31.