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Sunday, February 26, 2012

Positive market amidst new system screw-up

Stockmarket Review

By Elton P. Ebert

After weeks of stagnation, the market moved into a new phase of renewed vigour, but was unfortunately dampened by the introduction of the new ATS version on Friday which slowed down activity and curtailed the turnover to Rs.508 million.

The brokers say that they need time to get used to the new system, which according to some brokers is not so user-friendly. The indices were in positive territory for all the four days of the week yielding a high turnover of which a massive Rs. 3.7 billion turnover was produced on Thursday when seven million shares in LB Finance and four million shares in Aitken Spence were transacted. Foreign and local institutional activity in Commercial Bank, JKH, Lion Brewery and Asiri Surgical was another important factor seen during the week which created confidence in the bourse. For the purpose of statistics it should be noted that the bourse was under severe depression around mid-February, the ASI down to 5009 on February 14. Some analysts say that this transformation came because most companies have been releasing excellent earnings data, which drew some of the high net-worth investors into the market.

The leading three banking corporates, Commercial Bank and Sampath Bank announced cash dividends and scrip dividends recently while this week Hatton National Bank followed with a cash dividend of Rs 3 per share and a scrip dividend of 1 for 54,815 voting shares and 1 for 34,963 for the non-voting shares. Now many investors are posing the question whether NDB Bank and DFCC Bank will take the cue. Colombo Dockyard announced a dividend of Rs.6 per share and the capatilization of reserves in the ratio of 1 share for every 20 held. In a week where most shares were on the rise, the Malaysian Shalimar Malay rose to Rs.926, Selinsing to Rs 1,500, and Good Hope to Rs 1,414. The other interesting price movements were that of Harischandra Mills at Rs 2,475, Paragon Ceylon at Rs.1,900 and Nuwara Eliya Hotels at Rs1,180.

With the slight lift in market conditions, IPOs are staging an appearance. Mackwoods Energy Ltd will issue 25 million voting shares at Rs14 on the main board. The issue opens on the 22nd March but investors can subscribe from 8th March onwards.

Changes in directorates: Ceylon Hotels Corporation - Gunapala Tissakuttiarachchi was appointed a Director representing the ETF from February 16; Touchwood Investments PLC - D. M. De S.Wijeratne was appointed a Non-Executive/Independent Director effective 23rd February; Indo Malay PLC- Tennyson Rodrigo was appointed Non-Executive Independent Director on 21st February; Nation Lanka Finance PLC - Former Tax chief K.M.S. Kandegedara was appointed Non-Executive Director on 10th February; Muller & Phipps Ceylon PLC - A.R. Rasiah and S.N.P. Palihena were appointed independent Non-Executive Directors on 15th February; Seylan Developments PLC - S. Palihawadana was appointed Deputy Chairman on 17th February, M.K. Muthukumar a Diirector while H. L. Gunasekara as a Director. The turnover for the four days was Rs.6.8 billion as against Rs. 8.2 billion the week earlier.

Meanwhile both indices were improved, the All share Price gaining 281.13 points or 3% to end at 5566.30 while the Milanka was 253.35 points or 2.5% better closing at 4802.78.

source - www.sundaytimes.lk