Bourse dips to near 2-month low

Asia’s best performer, the Colombo stock market remained depressed owing to multiple reasons whilst expectations were high sentiments would improve today.

“Sustained selling pressure on the back of credit clearing and IPOs ahead dragged indices lower on thin volumes,” John Keells Stock Brokers said.

ASI was down nearly 2% and was languishing at lowest level since 18 January whilst MPI dipped by over 1.5%.                                  

Turnover was a disappointing Rs. 945 million, a near three month low. Only redeeming feature was a modest net foreign inflow of Rs. 17 million.

 “Market activity was lackluster as institutional and high networth investors continued to be on the sidelines. Short term profit taking has brought down indices over the last couple of weeks. A period of consolidation was due in view of the rapid gains made since December,” NDB Stockbrokers said.

Manufacturing (due to Piramal Glass) and Diversified (due to Richard Pieris) sectors were the highest contributors to the market turnover while both sector indices decreased by 2.10% and 2.17% respectively.

Piramal Glass made the highest contribution to the market. The share price decreased by Rs 0.50 (4.35%) and closed at Rs 11. Carsons and Bukit Darah continued to dip although their subsidiary, The Good Hope, appeared amongst the top three positive contributors. Other subsidiaries, Selinsing, Indo Malay and Shalimar also appreciated with low turnover.

A Reuters report said market fell after forced selling by brokers in line with a directive from the Securities and Exchange Commission (SEC) which has ordered stockbrokers to collect all debts and stop credit transactions by June 30. They have to cut their current debtors’ positions by at least 50 percent by March 31.

Analysts said the continuous forced selling in the last few days had dried up market liquidity and hurt investor sentiment.

The rupee closed weaker at 110.25/30 a dollar from Friday’s close of 110.01/03 on heavy importer demand for dollars and stock-related outflows, dealers said.