Negative start at Bourse

The Colombo stock market began a fresh week on a negative note with lackluster trading.

“Lack of buying interest led the indices to decline,” John Keells Stock Brokers said.

ASPI was down by 41.38 points (-0.63%) and MPI by 79.21 points (-1.12%).

Turnover was only Rs. 1.1 billion; nearly two times the 2009 daily average of Rs. 593.6 million rupees, but well below this year’s average of Rs. 2.4 billion.

“Indices started the week with a dive as the activity remained relatively low from last week. The bearish sentiment seems to continue although an upward push may be seen over the last two weeks of this year,” NDB Stockbrokers said, whilst Asia Securities said: “Despite being marginally up in the early hours of trading, both the indices lost ground consequently to end the day on a negative note.”

Manufacturing and Bank Finance & Insurance sectors were the highest contributors to the market turnover although both sector indices decreased by 0.11% and 0.52% respectively. Best Performing Sector was Information Technology (+2.18%) whilst the worst was Construction & Engineering (-3.23 %). Piramal Glass made the highest contribution to the market turnover while the share price increased by Rs 0.90 (13.64%) and closed at Rs 7.50.

Brown & Co. also contributed significantly to the market turnover with a crossing of 395,000 shares at Rs. 250 while the share price increased by Rs. 2.30 (0.93%) and closed at Rs. 251.

Two crossings were recorded for 78,000 shares of The Housing Development at Rs. 570 while another crossing was recorded for 250,000 shares of Chemical Industries (Colombo) at Rs. 135.

Asia Securities said strong high net worth and retail participation was evident in Piramal Glass.

Both Brown & Company and HDFC saw Institutional interest during the day. Furthermore, Three Acre Farms and Ceylon Grain Elevators continued to grab investor attention where they were traded mainly on the back of high net worth participation with both the counters gaining 5.2% and 9.1% respectively.

Despite the fall Colombo remains Asia’s best performer in 2010 with a 92.2% gain ahead of second-ranked Indonesia’s 46.9%.

The bourse is trading at a forward price-to-earnings ratio of 20.5, highest in Asia, compared with all-Asia’s 13.2 and global emerging markets’ 12.3, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 49.1, between the lower and upper neutral limit of 30 and 70.

The bourse saw a trading volume of 97.1 million shares on Monday, against an average volume of 93.4 million and 52.7 million in the past five and 30 days respectively. The 90-day average volume is 71.5 million.

Foreign investors have sold a net 24.3 billion rupees in shares this year, and on Monday sold a net 53.3 million after buying for nine straight sessions through Friday with a net inflow of 3.9 billion rupees.

Globally, Asian stock markets were mixed with Riversdale Mining higher in Australia on confirmation Rio held talks on a takeover offer. The Nikkei fell 0.3%.

European stocks were flat to slightly lower today, with ostensibly positive comments by U.S. Federal Reserve chairman Ben Bernanke about the possibility of further quantitative easing balancing out continuing concerns about European sovereign debt. FTSE 100 was 0.2% down.

NDB Stockbrokers commenting on the debt market said Secondary market Treasury bond yields increased marginally, while the market activity was dull.

The Rupee appreciated slightly as the exchange rate was recorded at Rs 111.20 – 111.23 per US $.

Reuters said the rupee closed firmer at 111.15/18 a dollar from Friday’s 111.38/40 on stock related dollar inflows amid Central Bank lowering the trading band by 10 cents to 111.00/40, currency dealers said.