Reports of extended power-cuts don’t augur well for the bourse

The Colombo Stock Exchange’s (CSE’s) benchmark All Share Price Index (ASPI) moved up marginally by 3.5 points to close at 571.73 points and the blue-chip MILANKA Price Index (MPI) by 6.19 points to close at 929.88 points on a ‘modest’ turnover of Rs. 25.9 million, on Monday, sources and data on a CSE release showed.

They said that Monday’s trading was dominated by both retail and high networth activity, while institutions continued to remain in the sidelines. Meanwhile, the day’s trading recorded a net foreign outflow, with foreign purchases amounting to Rs. 301,975 and foreign sales, Rs 13.6 million.

The single biggest contributor to the day’s turnover was National Development Bank (NDB), contributing Rs 14.5 million on a volume of 239,700 shares. NDB’s shares were traded at between Rs 60.25 and Rs 63 a share, before closing at Rs 63, the same price it closed the previous day. ‘Foreign sales accounted for as much as 52.5% of the day’s turnover,’ a Bartleet Mallory Stockbrokers (BMS) report said.

The sources further said that of these shares, a quantity of 196,100 was sold by a foreign fund to a local company at a price of Rs 60.25 a share. This single transaction alone was valued at Rs 11.8 million.

They were of the opinion that despite the fact that NDB had declared a 45% dividend and had also shown an 18% growth in ‘profit attributable to shareholders’ to Rs 612.9 million as far as the bank was concerned for the year ended December 31 of last year, and a 9% growth to Rs 598.7 million as far as the NDB Group was concerned according to results released on Friday, and though the value of an NDB share grew by Rs 1 yesterday, they however speculated as to whether the growth in its share value would continue in the coming days as well on the strength of the profits made by the bank according to its recently released results.

"It may go up today and then come down again tomorrow. This is the sort of pattern that we have been witnessing not only as far as NDB shares are concerned during the past few weeks, but shares in other companies as well," the sources said.

Then there are reports that the blackouts will be extended to six hours. This does not augur well for the market, they said. Meanwhile, the other ‘significant’ contributors to the day’s turnover were Pelwatte, Rs 2.2 million on a share volume of 193,100. Pelwatte closed at Rs 11.50; 25 cents less than the previous day’s closing figure.

Caltex Lubricants, Rs 900,000 on a share volume of 12,000. Caltex closed at Rs 73.50; 50 cents more than the previous day’s closing price. John Keells Holdings (JKH) Rs 886,000 on a share volume of 18,200. JKH closed at Rs 49; 75 cents more than the previous day’s closing price.

Vanik, a share volume of 276,800 to close at Rs 3; 25 cents more than the previous day’s closing price. Sources speculated that the article on Vanik which appeared on these pages on Monday may have contributed to the appreciation of its share price. And Asia Capital, Rs 500,000 on a share volume of 69,900. Asia Capital closed at Rs 7.25; the same price it closed the previous day.

Among some of the gainers were LB Finance, up by 26% to close at Rs 6; Bogala Graphite up by 20% to close at Rs 6 and Reckitt up by 18% to close at Rs 32. Meanwhile, BMS described Monday’s trading as unexciting.

‘Despite many investors adopting a wait and see policy towards the market, there were some bargain hunters who picked-up selected stocks at bargain prices, it said. This resulted in both indices witnessing moderate gains. It further said that price advances outnumbered declines by a comfortable margin of 40 to 20. (PA)