Colombo bourse under a cloud
Despite global stock markets coming under strain, Facebook is venturing out with a US$5 billion IPO much in contrast to our share market which is still languishing in despair, aggravated by the spate of holidays.
On Friday when trading closed at 12 noon the turnover was a paltry Rs 420 million, the dull sentiment attributed to the holiday fever.
Some clients were informed that many brokers and Fund Managers are utilising the holidays (if one day's leave is taken on Monday, it becomes a 4- day weekend) to go out of Colombo. The IPOS that were on the agenda have been placed on the backburner as a result of the depression at the Colombo bourse and the fact that the prices of last year IPOS like Textured Jersey are now at Rs 8.10, Expolanka at Rs.6.90, Browns Investments at Rs 3.60 and Softlogic Holdings at Rs.14.60. These losses and the margin calls are detrimental to the current market. This sentiment has been prevalent for the past few months, interpolated by sudden jerks of a few days of upward movement just like what was evident last week with the foreign buying of JKK. A segment in the market expects some improvement to be visible following the Central Bank's ruling allowing foreign owned firms to do margin providing.
Most companies have reported nourishing growth numbers. Ceylon Tobacco has reported a profit after tax of Rs.6.6 billion for the last year of which an astonishing Rs.6 billion went to the state! This was an increase of Rs.9.5 billion over the figure last year.
The price of this share has been hovering around Rs.500. In response to the healthy earnings released by NDB Bank, around 2.8 million shares were transacted on Monday with a moderate price improvement seen, but that proved to be temporary. It closed for the week at Rs.126
Haycarb and Keells Hotels also released good figures, the closing price for the former being Rs.139.80. In an exercise depicting future growth, Chemcel Ltd, a subsidiary of Chemanex which is under the CIC Holdings umbrella had a soft opening of the company's Carboxy Methylated Starch extrusion plant on January 28 at Mirigama in the EPZ using patented technology from US firm Archer Daniels Midland. Chemanex shares are rarely traded, unlike CIC Voting and Nonvoting. CIC Voting shares were at Rs 98.90. Asia Asset Finance continued to remain in the active list for another week, although on a reduced scale, its closing level being Rs. 5.90. Regnis Lanka came into the picture after a long absence with a gradual price improvement reaching Rs. 353 and cooling off to Rs. 339.80 on Friday.
A high volume of around 27 million shares were transacted in Acme Printing for four days of the week, with a daily price improvement until Thursday when it reached Rs. 34.50, but suddenly veered down to Rs 23.70 surprising many. Commercial Bank Voting and Non-voting shares were moderately active. Analysts expect favourable earnings figures.
Environmental Resources Investments Warrants W 00002 came in for a hefty transaction during the week. A continuous rise was noticed in Swarnamahal Financial Services and the stock was Rs. 157.50 at close.
Changes in Directorates: Vallibel Power Erathna - S. Shanmuganathan was appointed a Non-executive Director from 25th January; Swarnamahal Financial Services - Ms Soma Edirisinghe resigned as Chairperson and her son, Jeewaka Edirisinghe appointed to this position on 31; Sampath Bank - D. Sooriyaarachchi was appointed alternate Director to Prof. K A Malik Kumar Ranasinghe; Hayleys MGT Knitting Mills - Dr Emerick Fernando was appointed as Executive Director, and Haresh Somsahantha and Nandajith Somaratne as Non-executive Directors.
The weekly turnover was Rs.4.9 billion, much lower than the Rs. 6.7 billion registered last week. Both indices were also disappointing, the All share Price Index losing 139.34 points or 0.125% to end at 5586.10 while the Milanka was 108.78 points or 1% lower at 4813.03.