By Paneetha Ameresekere
The market, on Monday, continued with its virtual downward slide which was begun from the first trading day for the New Year which was on Wednesday, with the Colombo Stock Exchange’s (CSE’s) benchmark All Share Price Index (ASPI) losing 6.09 points to close at 603.45 points and the blue-chip MILANKA Price Index (MPI) down by 13.85 points to close at 992.9 points on a turnover of Rs. 46.2 million at the end of the day’s trading, sources said.

‘Retailers and high networth individuals were looking for bargains, and anyone with no holding power (that is, being forced to sell at virtually give-away prices in order to meet the settlement date which is five market days from the date of purchase), including retailers, high networth individuals and institutions selling,’ the sources, describing Monday’s trading said.

‘The underlying feature required to boost the market is institutional support, at least in the medium term, say, the ability to hold onto stocks (without selling) for a period of six months to one year,’ they further said.

The sources, in their description, also said that the performance of the market during the past few days ‘was a period of consolidation.’ The market cannot ‘go up’ for an indefinite period of time, the sources, explaining the decline experienced by the market during the past few days said.

They were also of the opinion that for the market to receive a boost, government institutions such as the National Savings Bank (NSB), Bank of Ceylon (BoC) and EPF and ETF Funds, ‘which are currently waiting on the sidelines, should once again be active in the market.’

‘They are not buying. They are looking for bargain prices, having joined the bandwagon, in waiting to pick-up stocks at bargain prices, the sources said. They also said that while retailers were both selling and buying; institutions were also selling and high networth individuals and retailers were buying in selected stocks such as JKH, NDB and Commercial Bank.

They further said that a high interest rate regime also does not augur well for the stock market. ‘In such situations, investors would prefer to invest in fixed deposits and in treasury bills which give close to nearly a 20% return, rather than in the market,’ the sources said.

They also said that the Central Bank’s recent 5% cut in rates had so far not percolated down to the bank borrower, with interest charged on temporary overdrafts still being in the region of 28% in certain instances.

‘Half-yearly corporate results which are now being released and which generally show a negative performance by those corporates, with no significant growth in earnings, do not support the situation either,’ they added.

Meanwhile, the major contributors to Monday’s turnover were John Keells Holdings (JKH), Rs. 14.7 million, of which Rs. 4.2 million were foreign purchases, on a share volume of 265,900. JKH closed at Rs. 55, Rs. 1.25 less than the previous day’s closing price.

Commercial Bank (voting), Rs. 7.8 million on a volume of 54,200 shares. Commercial Bank closed at Rs. 130, Re. 1 more than the previous day’s closing price. National Development Bank (NDB) Rs. 2.8 million on a share volume of 41,900. NDB closed at Rs. 68, Re. 1 less than the previous day’s closing price.

Tokyo Cement, Rs. 2.4 million on a share volume of 40,400. Tokyo Cement closed at Rs. 60, 50 cents less than the previous day’s closing price. Vanik, a share volume of 437,200. Vanik closed at Rs. 4.25 cents less than the previous day’s closing price.

And Colombo Dockyard, a share volume of 55,200. Colombo Dockyard was down by Rs. 1.50 to close at Rs. 23 and a volume of 150,100 shares of Asia Capital. Asia Capital closed at Rs. 8, 25 cents less than the previous day’s closing price.

Among some of the major losers were Hayleys, down by Rs. 3 to close at Rs. 116; Hatton National Bank down by Rs. 2 to close at Rs. 50 and Commercial Bank (non-voting) down by Rs. 3.50 to close at Rs. 85.50.

Among the gainers were Chemical Industries (Colombo) Ltd (CIC) non-voting, up by Rs. 2.50 to close at Rs. 42.50. Elephant Lite, up by Rs. 2.25 to close at Rs. 6.75 and Agalawatte Plantations, up by Re. 1 to close at Rs. 9.