Both indices of the Colombo Stock Exchange dipped yesterday as there was no communication from the market regulator over restrictions on broker-credit, which, according to brokers, is dragging the market down.
The positive hopes of regulator approving the broker provided credit pushed up the market since the beginning of this week.
However it is anticipated by market sources and sources from the Securities and Exchange Commission that the regulator has already put up a board paper at the commission meeting held on Wednesday the 10 August 2011.
On the contrary, when asked the SEC Director General Malik Cader said, the regulator still needs to review and study the overall current procedure that is practiced by brokers on providing credit.
“We are reviewing the proposal submitted by brokers” Cader said adding Commission had not yet proposed anything on the issue.
Accordingly sources added that in the board paper it is suggested that all brokers should be allowed to lend their net capital which is in excess of Rs. 35 million (minimum net capital requirement) (Leveraging zero times). Further it has been suggested to provide credit up to Rs.5 million per individual according to the paper.
Largely due to the blunt responses from the regulator All Share Price Index (ASPI) dipped 52.81 points to close at 6,767.09 (down 0.77%) and Milanka Price Index (MPI) fell 34.24 points to close at 6108.96 points (down 0.56%).
A total of 113.8 million (down 10.68%) shares were traded recording a turnover of Rs.2.5 billion dipped 1.26%. There were 60 gainers and 134 listed losers during the day.
Nearly 34 million shares of Seylan Developments (CSD) changed hands whilst the highest gainer was Lanka Hospitals (LHCL) that rose by Rs.12 to close at Rs.55.90 (up 27.33%) followed by Orient Garments (OGL) that rose 25.46% by Rs.8.30 and closed at Rs.40.90.
Land and Property sector was the main contributor to the market turnover and Seylan Developments (CSD) was the main contributor to the market turnover. The share price decreased by Rs.0.90 (4.76%) and closed at Rs.17.10 although reached the higher price level at Rs.20.60 during market hours.
Foreign purchases rose 5.47% to Rs.141.08 million and foreign sales dipped 46.08% to Rs.185.5 million. Price-to-forward Earnings Ratio (PER) fell 1.45% to 19.7 times.
Among the crossings were John Keells Holdings (JKKH) 255,500 million shares at Rs.1 95.10 and Central Finance (CFIN) 19,600 shares at Rs.1,366 and 1 5,000 shares at Rs.1,350 per share.
source - www.dailymirror.lk
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