CSE's losing streak continues

The Colombo stock market’s losing streak continued yesterday with both indices down by over 1% despite support from the SEC’s relaxation of broker credit rules on Monday.

“Market managed to maintain the turnover level above the Rs. 1 billion mark amidst the dip witnessed in both indices due to widespread selling seen across the board,” NDBS  said.

“Colombo bourse extended losses as the selling pressure emerged strong, particularly in the speculative lot. As we earlier mentioned, the reckless run with speculative stocks being on the front, didn’t last long, as such drives are primarily on the motive of short term gains,” said Arrenga Capital.

Asia Wealth’s remark was “Market experienced a volatile condition as both indices took a major plunge, closing in the red whilst SC Securities said the market sentiment eroded further despite the enhancement of credit limits granted to brokerage houses by the Securities and Exchange Commission.

Lanka Securities viewed the dip as “considerable” in spite of the favourable credit amendments given to broking houses. Interestingly, it said all the index heavy counters which are attached to MPI dropped heavily except for Ceylon Tobacco Plc and Commercial Bank Plc. Furthermore counters such as John Keells Holdings Plc, Sampath Bank Plc, Lanka Orix Leasing Plc and Dialog Axiata Plc dropped to their 52 weeks low during trading.

Arrenga said losses were made in Asia Asset Finance (-35.5%), Nation Lanka Finance (-35.3%), Citrus Leisure [W: 0018] (-15.8%), Environmental Resources Investments (-11.4%) and its Warrants [W: 0006] (-11.9%), [W: 0003] (-10.2%), Dankotuwa Porcelain (-11.1%), Chilaw Finance (-11.1%) and HVA Foods (-7.8%). Following the steep descend, ASPI closed at 5,846.4 points (down 78.2 points), whilst MPI settled 74 points below the critical support level of 5,000.

Debut, PC Pharma, which initiated trading by way of an introduction, delivered outstanding performance as it closed the day at Rs. 51.6 (up 416%).

The counter which had a reference price of Rs., fluctuated between a range of Rs. 50 to Rs. 89, as it saw a total of 14.3 million shares in being traded. The trading initiated with the counter seeing a large block carrying 10 million shares (circa 10% stake), being crossed off at Rs. 50 per share.

This followed several other large transactions accumulating to around 4.1 million shares being taken on board on the counter.

Another speculatively driven counter, Environmental Resources Investments, extended interest, however continued to slump amidst profit taking in the counter. Interest also prevailed in Swarnamahal Financial Services, Blue Diamonds (Voting and Non – Voting), Regnis Lanka, Colombo Land & Development and Amana Takaful.

Buying interest emerged in two of the active dividend playing counters, Ceylon Tobacco & Nestle Lanka, in anticipation of healthy earnings. Both the shares were seeing actively traded, as the latter saw a single block of 55k shares being traded at Rs. 916.0 each. Meanwhile, the former saw its price gaining by 3.9% at its close of Rs. 496.9, appearing among the top gainers’ list for the day. Furthermore, John Keells Holdings and Distilleries both saw some interest, albeit dipped by 2% & 1.2% respectively. Buying interest emerged in finance sector player, Central Finance, on the expectation of healthy earnings growth, as it gained by 2.8% at its close of Rs. 200.0.

NDB said continued interest in retail favourite counters such as Asia Asset Finance and Environmental Resources was seen. Debutant PC Pharma contributed more than 50% of the market turnover due to the crossing which took place.

Chemical and Pharmaceutical sector was the highest contributor to the market turnover (due to PC Pharma) and the sector index surged by 13.55%.

Bank, Finance and Insurance sector became the second highest contributor to the market turnover (due to Asia Asset Finance) and the sector index slid by 1.43%. Beverage, Food and Tobacco sector also contributed heavily to the market turnover (due to Nestle Lanka and Ceylon Tobacco) and the sector index closed firmer by gaining 0.48%.



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