* Traders opt out for a while due to new system
Profit taking pulled down the Colombo Stock Exchange yesterday (Feb. 27) after about a week’s run on making positive gains as a new trading system has made it difficult to judge the true value of stocks, brokers said.
The All Share Price Index closed 89.71 points lower, down 1.61 percent to 5,476.59 points while the Milanka Price Index of more liquid stocks fell 1.03 percent, down 49.39 points to 4,753.39.
Turnover amounted to Rs. 616 million on 21.2 million shares changing hands during the day which saw 49 counters close in positive territory against 167 that closed in the red.
"We are of the opinion that the new trading system that is being implemented at the brokerages is causing traders to stay out of markets temporarily. This has led to some profit taking as we are unable to judge the true value of stocks. Spreads have widened and until the system runs at peak performance, we are unlikely to see much activity this week," Bartleet Religare Securities Technical Analyst Stefan Juriansz said.
"Technically the index seems to be finding some resistance at around 5,650. If we see the possibility of what the technicians refer to as a double bottom, that would only present us with a better opportunity to pick up strong investments. As discussed last week we are keeping an eye on certain value counters such at JKH, SAMP and VONE for index direction and the opportunity to enter into such securities," he said.
"All nine of the world’s worst-performing equity indexes this year are in frontier countries. This was due to the fact that the larger, more liquid markets offered relatively more compelling investment opportunities. However now Bank Julius Baer & Co. says the losses create buying opportunities for long-term investors and advise clients to look for quality as opposed to underperformance," Juriansz said.
As at January 16, 2012, the Colombo Stock Exchange was the second worst performing market in the world.
Foreign purchases continued to be positive with a net inflow of Rs. 224.4 million during the day.
source - www.island.lk
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