Wednesday, July 27, 2011

Bourse recovers slightly

The Colombo bourse bounced back yesterday, after a seven month low on the previous day. Analysts see it as temporary.

The indices, All Share Index gained 59.24 points closing at 6493.58 while Milanka gaining 33.88 points to close at 5928.45. The turnover for the day was Rs.1.99 billion.

However, the day started with a negative note when the All Share Index (ASI) dipped even lower before the previous day to 6415.7. The market then bounced back strongly,  following buying spree unleashed by investors.Yesterday. the Colombo bourse saw four major crossings. A crossing of 175, 000 shares of Central Finance took place at Rs.1450 while a crossing of one million shares of Soflogic Holdigns at Rs.23.70. Another crossing of 123, 200 shares of John Keells took place at Rs,185 and 2.5 million crossing of Dialog shares at Rs.8. “I don’t think we’ll be able to sustain this.

This is temporary. The market is heading for a correction,” a market analyst told Mirror Business.

He also said the bouncing back was due to technical analysis which determines the bottom that is going to be at a certain level based on the past data, as the market hit 7 month low on the previous day.

“When this information gets disseminated, everyone starts buying. I think that’s what happened” the analyst said.

According to BMS daily market report, Investor speculation on extending credit days paved the way for the abrupt surge. “Retail investors were more active during today’s trading session. Foreign investors emerged as net sellers. Price gainers outperformed losers 166 to 68,” the report noted.
Gainless performance by BIL

The debut shares of Browns Investments PLC (BIL) opened 10 cents above the issue price of Rs.5 yesterday.

The highest price the share traded was Rs.5.30 and the lowest was Rs.4.5. The average share price stood at Rs.5.

The debutant share contributed Rs.374 million to the day’s turnover  whilst 74.7 million shares changed hands. It was evident that the initial investors and private placement parties also disposed some of their shares on the first day of trading.

BIL offered 50 million shares to the public at Rs.5 per share to raise Rs.250 million. Before that, 830 million shares were issued to private parties at the same price in February this year.   

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