Bourse at four-wk low; speculative buying continues

Wednesday, 8 June 2011 01:23 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s stock market fell on Tuesday on retail profit-taking with speculative trade in Hunter and Company boosting the day’s trading volume and turnover, while the rupee edged up on heavy exporter dollar sales.

Illiquid hardware importer Hunter and Company plummeted 40 per cent on large block deals, which analysts attributed to speculation.

Sri Lanka’s main share index closed 0.83 per cent or 60.89 points weaker at 7,294.54, its lowest since 11 May.

Traders said there was selling pressure as investors cashed in to have funds ready for the upcoming Softlogic initial public offering, which opens for subscription on Thursday.

Traded volume was 513.9 million, against a five-day average of 313.9 million. The 30-day and 90-day average trading volumes were 127.1 million and 98 million respectively. Last year’s daily average was 67.9 million.

Foreign investors were net sellers of Rs. 88.3 million worth of shares on Tuesday, ending four straight gains and they have sold a net Rs. 6.37 billion worth shares in 2011 after a record 26.4 billion in 2010.

The day’s turnover was Rs. 4.17 billion ($ 38.06 million), well above last year’s average of 2.4 billion and this year’s daily average of 2.9 billion.

The bourse is still Asia’s best performer in 2011 with a 9.93 per cent gain, after bringing in the region’s top return of 96 per cent last year.

The rupee closed firmer at 109.50/60 a dollar from Monday’s 109.65/70 on exporter dollar sales as the greenback has softened after weak US economic data last week, dealers said.

Two more to play the band

In terms of the SEC directive dated 14 September 2010, the 10% price band was imposed on Hunter as well as Alufab with effect from 8 June 2011 to 14 June 2011 (both days inclusive).

The 10% price band imposed on Singer Industries will be removed from today (8 June).

Orient Garments to list via introduction

The Colombo Stock Exchange has approved in principle an application submitted by Orient Garments Ltd. to list 54.916 million shares on the Diri Savi Board.

The listing is by way of an introduction, the CSE added. Orient will be the first fully-fledged apparel manufacturer to list on the Colombo Bourse, whilst there are several textile producers already listed.

Hunter hunted

The market also saw play on illiquid Hunter with Al Nakib selling 250,000 shares and Nimal Perera, Dilith Jayaweera and BoC on the buying side.

Nakib sold at Rs. 1,100 level after Hunter trading at Rs. 1,900. The stock saw recycling of trades as well. Free Lanka Capital also traded heavily with LOLC on the selling side.