Colombo bourse still in a stupor

Stockmarket Review

By Elton Ebert

It was an extension of the stupor for yet another four days at the Colombo bourse. Next week will also be a 4-day trading week, and brokers say the lethargy in the market is due to the series of holidays. Some brokers are telling their investors that themarket should accelerate after the holiday period is over. They predict that the market should take off in early June when the ATS is expected to function properly.

During the week there were no major deals except for the regular demand for Amana Takaful and PC House which evoked extra interest of late. A further nine million shares were transacted on Friday, its closing level being Rs 7.70.

Textured Jersey in which fair support was mirrored of late has changed plans on the organic expansion and now concentrating on acquiring an operating fabric mill within the Indian sub-continent. The company is also evaluating options on an alternate energy source. The share is now priced at Rs 7.90. Piramal Glass in which demand has been steady released impressive earnings of post-tax profits up by 19% for the last financial year. Early last month the EPF purchased a massive 45.3 million shares in the company to become the largest local stakeholder. There is also a first and final dividend of 36 cents per share pending. Among the recent IPOs, Access Engineering was down to Rs. 20.70, while Mackwoods Energy was also down to Rs.13.20. Peoples Leasing in which a dividend of 50 cents is pending was at Rs.11.40

The saga of the 7.8 million shares in The Finance Co (TFC) at an average price of Rs.49.74 equivalent to 13.02% of the company purchased by NSB, continues. The brokers who did the deal justify their action by saying that when a substantial slice is offered the seller can demand a price higher than normal. The other brokers say that this price was too high because the company has accumulated losses of billions of rupees although they made a profit recently. There is a speculation that this quantity was offered to a foreign fund much lower than the transacted price but this news was leaked out, and extra effort was made to beat that offer which became a reality. Meanwhile retailers are hopeful that the NSB might increase its stake in TFC so that they can sell their shares at better levels. Friday’s closing price was Rs 30.

Changes in directorates: Commercial Bank of Ceylon – A.L. Gooneratne retired from the bank as Managing Director and has been replaced by Ravi Dias. Jegan Durairatnam was also appointed to the board; Union Bank of Colombo - Ajita de Zoysa retired as Chairman and has been replaced by Alexis Lovell. Asoka de Silva was appointed Deputy Chairman. Ananda Atukorale and Ajith Wijeyesekera are retiring from the board on May 7;

Chilaw Finance - Chandana Kumarage was appointed Director/CEO and Nilantha Perera as Chairman; PABC - Channa de Silva and G. Prasanna were appointed directors; TFC - Dinal Wijemanne resigned from the Board; Lanka IOC - Subodh Dakwale was appointed Managing Director replacing K.R. Suresh Kumar.

Turnover for the week was Rs.1.9 billion against Rs.2 billion last week. Both indices were lower with the All Share Price Index losing 47.44 points or 0.9% to finish at 5382.14, and the Milanka Index 0.5% or 22.73 points lower at 4830.80.

source - www.sundaytimes.lk