Investors, brokers lose steam: All look to Laugfs debut for new energy

Wednesday, 8 December 2010 00:16 - - {{hitsCtrl.values.hits}}

Sri Lanka Insurance General Fund transfers 15% stake in Lanka Hospitals to Life Fund for Rs. 1 b

In an apparent sign of lost steam on the part of investors and brokers the Colombo stock market continued its bearish run for the second consecutive day with expectations that debut of Laugfs today would ignite fresh energy.

Since October peak the market has lost Rs. 215 billion in value and the maiden trading of Laugfs voting shares today will be key to lift investor mood. The Rs. 2.5 billion IPO of Laugfs ignited Rs. 42.3 billion worth of demand.

Lacklustre sentiments yesterday were despite relatively high turnover thanks to some realignment of portfolio within Sri Lanka Insurance Corporation with an in-house deal involving Lanka Hospitals (Apollo).

“The indices continued to decline while activity levels boosted due to a sale of over 15% stake of LHCL,” John Keells Stock Brokers said. ASPI was down by 37.22 points (-0.57%) and MPI by 38.44 points (-0.55%) .

Turnover was Rs. 3.35 billion largely on account of a crossing of 35,000,000 shares of Lanka Hospitals at Rs. 31. The share price increased by Rs 1.50 (4.82%) and closed at Rs 32.60. As at September 2010, SLIC General Fund held 91 million shares of 40.7% stake in Lanka Hospitals whilst Life Fund held 31 million shares or 14% stake. General Fund is in need of cash hence the transfer.

“Indices continued with the downward streak although they marked a slight gain during early trading.

However turnover was boosted by a transaction involving The Lanka Hospitals,” confirmed NDB Stockbrokers.

Healthcare and Bank Finance & Insurance sectors were the highest contributors to the market turnover. Healthcare sector index increased by 0.61% while Bank Finance & Insurance sector index decreased by 0.61%. Best Performing Sector was Construction & Engineering (+0.85%) whilst the worst was Services (-5.09 %)

Seylan Bank also contributed significantly to the market turnover with a crossing of 6,150,000 shares at Rs. 100 while the share price increased by Rs. 2.40 (2.42%) and closed at Rs. 101.50.

Three crossings were recorded for 2,275,500 shares of Distilleries at Rs. 166; 1,000,000 shares of John Keells Holdings at Rs. 290 and 100,000 shares of Sampath Bank at Rs. 255.

Meanwhile Asian stock markets ended mostly higher as the Shanghai market recovered from early losses on a rate report. The Nikkei was down 0.3%.

European stocks raised expectations that Ireland’s austerity budget will pass a parliamentary vote later in the day. FTSE 100 was up 0.6%. U.S. blue-chip stocks edged lower on Monday as investors sobered by Federal Reserve Chairman Ben Bernanke’s tepid economic outlook paused after last week’s climb. Dow fell 0.17%.

NDB Stockbrokers commenting on the debt market said secondary market Treasury bond yields were unchanged, while the market was inactive. Meanwhile the Rupee appreciated slightly as the exchange rate was recorded at Rs 111.13 – 111.15 per US $.