Market likely to maintain low profile this week

Monday, 19 September 2011 00:12 - - {{hitsCtrl.values.hits}}

Senior brokers said the Colombo stock market was likely to decline marginally next week, keeping a low profile as only one fourth of sales volumes that had to be completed to comply with a Securities and Exchange Commission directive to reduce debt had been carried out.

Three fourths of share sales have to come into the market and these are forced sales. One or two stocks may pick up but these are likely to be low value stocks, a trend that has been continuing, a stock broker said. These may not be justifiable but are good signs because otherwise retail investors will get fed up, he said.

Last week the All Share Price Index lost 119.41 points to close at 76,870.92 while the Milanka Price Index dropped 77.69 points to close at 6,209.24. Average daily turnover was Rs. 2 billion and net foreign outflows for the week were Rs. 958.4 million.

Investors are also now wary as to whether their investments are safe, brokers said.

The Securities and Exchange Commission recently cautioned five investment advisors and two investors for market manipulation in trades carried out last year during July and early August and retail clients are likely to keep away from the market.

Foreigners who have been net sellers since January are likely to remain net sellers and there will be more pressure on the market as there is a limit to how much State funds and high net-worth individuals can absorb, he said. The market is likely to be dull next week, brokers said.