Friday, October 7, 2011

Stock market’s return dips below 1% again

The misery continues at the Colombo stock market as its year to date return yesterday dipped below the 1% threshold once again, a level last witnessed in mid July.

A 0.4% dip in All Share Index saw the year to date dip from Wednesday’s 1.06% to 0.63% yesterday. On 19 July  the Bourse was recording a similar rate of return after it went to the negative territory on 21 July.

“As witnessed over the past few days, the market was largely stagnant,” NDB Stockbrokers said.  Turnover was only Rs. 1.1 billion below Wednesday’s Rs. 1.3 billion.

“Silenced high net worth and institutional investors coupled with negative contribution from foreign investors; have all led the market to deviate from its usual challenge in punting on the attractively valued fundamentally backed counters,” Arrenga Capital said.

“Bourse had been recently moving on market news, rumours and innuendo; bringing the low-profile speculative counters to spotlight whilst the fundamentally steady counters with attractive valuations take a quiet backstage play,” it added.

Arrenga said activity levels were very much discouraging with Sampath Bank, Vallibel One, Aitiken Spence and Distilleries Company of Sri Lanka being the only steady counters that registered some investor involvement.

NDB said profit taking in E-Channelling occurred during the early hours of trading and the counter closed Rs 0.20 lower. Manufacturing sector was the main contributor to the market turnover (due to Regnis Lanka) and the sector index decreased 0.41%. The share price of Regnis Lanka increased by Rs. 42.80 (9.85%) to close at Rs. 483.00.

E-Channelling was the main contributor (Rs. 166.3 million) to market turnover and the share price decreased by Rs. 0.20 (2.04%) to close at Rs. 9.40. Diversified Holdings sector also contributed to the turnover (due to John Keells Holdings) and the sector index decreased by 0.30%. The share price of John Keells Holdings remained unchanged at Rs. 200.00. Renewed interest was witnessed in Panasian Power.

Crossings took place in Distilleries and Aitken Spence. 202,200 shares of Distilleries changed hands at a price of Rs. 170.00 while 159,900 shares of Aitken Spence changed hands at Rs. 135.00.

Arrenga also said MSCI Asia Pacific Index added 3.3% whilst S&P 500 index futures gained 0.6%. More than seven stocks advanced for every one that fell on MSCI’s Asia Pacific Index with 10 industry groups seen moving up. The gauge snapped a four-day, 16% dip, and biggest fall since 2008.

Japan’s Nikkei 225 Stock Average gained 2.6% Asian stocks rebound is believed to be after the better-than expected US economic data pointing a no-recession economy and optimistic play by the European leaders, to boost earnings outlook for exporters. Chinese and the Indian markets have been closed for holidays. Nasdaq-100 index rebounded rising 0.2% after witnessing a dip following the news on the death of Apple Inc. founder, Steve Jobs.

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