Stock market survives despite lack of SEC support

The Colombo stock market didn’t crash but survived suffering a dip of only 0.7% yesterday despite lack of much anticipated regulatory support by way of relaxed credit rules following SEC Commissioners meeting on Wednesday night.

The benchmark All Share Index dipped by 53 points or 0.7% and MPI by 34 points or 0.5% whilst turnover remained a respectable Rs. 2.5 billion almost same as previous two days.

“The indices ended lower on selling pressure with speculative trading being evident on selected counters driven by retailers,” John Keells Stock Brokers said.

Foreigners continued to exit with net selling being Rs. 44.4 million, which however was low in comparison to previous market days.

DNH Financial said reversing Wednesday’s gains, the market declined marginally with the ASPI and MPI losing 0.8% and 0.6% on the back of retailing selling in selected counters.

Stock market...

Turnover meanwhile fell by 1.2% to Rs.2.5 bn with significant trading however recorded in Seylan Development, East West and Lanka Hospitals which together accounted for 42% of the total. Losers outpaced gainers with declines in Lanka Ashok, Kelani Cables and Cargo Boat falling by 15%, 13% and 12% respectively while Lanka Hospitals, Orient Garments and Marawila Resorts gained 27.3%, 25.5% and 13.5%.

Dankotuwa Porcelain released its 1Q2012 results reporting a net loss of Rs.32.5 mn as against a loss of Rs.15.6 mn during the comparable period last year. The earnings erosion was mainly due to a 6% drop in sales notwithstanding a decline in operating expenses.

Supported by a strong 112% growth in top line revenues to Rs.7.2 bn on the back of a tax cut on vehicles and strong economic fundamentals, DIMO reported a massive 321% rise in net profits to Rs.636 mn.

“As we come to the end of the week, we expect the market to move increasingly sideways ahead of a possible re-rating next week where we expect it to once again test the 7000 psychological resistance level notwithstanding the uneasiness in the global markets,” DNH said.

Arrenga Capital said investor sentiments weakened with SEC taking more time to analyse deeper into the matter with regard to finalising their decision on credit rules. ‘

“However, continuing retail and high net worth investor participation on selected mid to low cap counters held up the activity levels in the healthy zone,” it added.  

Property sector counters continued to top the retailers’ favourite list with Seylan Developments & East West Properties leading the turnover list for the 3rd consecutive day. Despite registering price dips of 4.8% and 0.3% respectively, both the counters collectively contributed 34.7% of the day’s turnover.   Meanwhile, renewed retail & high net worth investor participation in Lanka Hospital Corporation led it to 2nd top the price gainers list as it appreciated by 27.3% today. As retail & high net worth individuals chase in Orient Garments was reactivated, counter registered a price gain of 25.5% to close at Rs.40.89. Retail play in Laxapana Batteries continued into today’s trading as well. Furthermore, heavyweight John Keells Holdings witnessed a parcel carrying 255.5k shares being transacted at Rs.195.10, whilst Central Finance also registered two blocks totaling to 34.6k shares being crossed off at Rs.1,350.0 & Rs.1,366.0 each.

Asia Wealth Management said the market lost considerable value in the first half of trades, recovered sufficiently to reach an intra-day high of 6,797 points, however it lost ground and continued its downward trend to close at 6,767 points. Heavy retail interest was witnessed in the property counters where East West Properties and Seylan Developments emerged as the top traded counters of the day, accounting for 35% of today’s turnover. Both counters advanced in value for the first half of trading and closed down at Rs. 38.00 and Rs. 18.00 respectively. Interest in Index heavyweight John keels Holdings remained low as the day’s trading was dominated by retailers with only a single block of the counter changing hands at a price of Rs. 195.10. In contrast, Lanka Hospital Corporation stock appreciated by 25.46% closing the day at Rs. 55.90.



Lanka Securities said Colombo stocks ended in red note with both indices recording losses. ASI dropped 52.81 points (0.78%) to close at 6,767.09 while sensitive MPI closed at 6,108.96, a dip of 34.24 index points (0.56%).

Ceylinco Seylan Development Plc emerged as the top contributor to the market turnover with an amount of Rs.638.4mn. Ceylinco Seylan Development was the mostly traded counter during the day where a total of 33.7mn shares traded. Counter reached a high of Rs.20.60 and closed at Rs.17.10, down Rs.1.80. Further, East West Properties Plc (Rs.230.8mn) and Laxapana Batteries Plc (Rs.113.4mn) contributed significantly to the daily turnover while attracting heavy retail investor interest throughout the day.

Meanwhile, Marawila Resorts Plc, The Lanka Hospitals Plc and Orient Garment Plc were among the actively traded counters of the day.

Softlogic Finance Plc –Rights commenced its trading today and ended as the top gainer. The counter reached the high of Rs.6.50 and closed at Rs.2.90, up Rs.2.30 (+383.3%).

Foreign participation accounted for 6.5% of the total market activity and at the end of the day foreign investors ended as the net sellers with a net foreign outflow of Rs.44.5mn.

SC Securities said the market once again went into the red after Wednesday’s upswing. It also said the major contributors to the market turnover were Seylan Developments (CSD), East West Properties (EAST) & Lanka Hospitals (LHCL)

“CSD lost momentum, dropping by 5.26% (LKR.0.90) over Wednesday’s close. More than 33.6Mn shares of CSD traded generating the days’ highest turnover Of LKR.638.37Mn. The counter ended the day at LKR.18.00. EAST ended the day marginally lower at LKR.38.00, losing 0.26%,” SC Securities said.

Orient Garments saw its’ share price rise by 25.46% (LKR.8.30) over the previous closing. A volume of 3.1Mn shares traded today generating a turnover of LKR.118.86Mn.

LHCL climbed by 27.3% (LKR.12.00) over yesterdays’ close with close to 3.5Mn shares transacting. The counter ended the day at LKR.55.90.

Crossings were seen in Central Finance (15,000 shares at a price of LKR.1,350.00 & 19,600 shares at a price of LKR.1,366.00) & John Keells Holdings (255,500 shares at a price of LKR.195.10)

Foreigners ended the day as net sellers with foreign sales worth of LKR.185.5Mn against foreign purchases of LKR.141.10Mn, resulting in a net foreign outflow of LKR.44.4Mn.