* CSE tumbles for second day on profit taking
The Colombo bourse was yesterday down sharply for the second day running on a turnover of Rs.1.22 billion, down from the previous day’s Rs.1.84 billion, with the All Share Price Index losing 61.67 points (1.04%), the Milanka down 54.22 points (0.98%) and S&P dipping 36.09 points (1.14) with 190 losers strongly outpacing 65 gainers with 49 counters closing flat.
Brokers said that the market was very volatile throughout the day and attributed the downturn mainly to profit taking.
"Given the way the market moved up very fast, the downturn was inevitable with retailers, particularly those trading on credit, taking whatever profit possible," a broker said. ``Given the sharp fluctuations, many feel it’s better to be in cash than in stocks.’’
Despite the sharp fall in the indices, brokers and analysts considered the turnover of over a billion rupees satisfactory.
"Sustained selling pressure across the board dragged the indices down sharply. Activity levels were driven by trades on banking, finance and diversified counters including crossings on JKH and SAMP dominating the day’s turnover," John Keells Stockbrokers said.
"The market opened on a negative note and experienced a steep fall owing to panic selling and some profit taking in the morning trading session. However, the main index eventually recovered mid-day from the sharp drop, although the day ended in the red territory. There was a mix of retail, institutional and HNI participation while specific foreign interest was evident in JKH leading to a net foreign inflow of LKR 189.75mn," Bartleet Religare Securities said.
George Steuart Finance shares continued to surge yesterday as well, gaining 21.81 percent to close at Rs. 1,496.90. A week ago the share debuted on the bourse closing at Rs. 193.70.
There were block trades in Sampath Bank where 100,000 shares were crossed at Rs.210 and 200,000 JKH crossed at Rs.218 in deals worth Rs.21 million and Rs.43.6 million respectively. Both crossings were at previous price levels, brokers said.
The big turnover generators were JKH (Rs.183.9 million), Nation Lanka Finance (Rs.72.7 million), Browns Beach (Rs.57.5 million) and Central Investment and Finance (Rs.47.9 million).
JKH closed Re.1 up at Rs.218 on over 0.8 million shares traded on the floor between Rs.215 and Rs.218.20 while Nation Lanka closed 50 cents down at Rs.14.50 on nearly 4.9 million shares done between Rs.14.50 and Rs.15.20.
Browns Beach closed Rs.1.90 up at Rs.29.20 on two million shares done between Rs.26.20 and Rs.29.50 while Central Investment and Finance closed Rs.2.60 down at Rs.8 on nearly 5.5 million shares traded between Rs.1.90 and Rs.10.60.
Other than JKH, Sampath Bank closing Rs.2.40 down at Rs.212.50 on over 0.1 million shares and Central Finance closing Rs.1.50 down at Rs.176 on over 0.1 million shares were the only blue chips on the most traded list.
Lanka Hospitals (Apollo) closed 50 cents down at Rs.45.10 on nearly 0.7 million and Vallibel One closed 70 cents down at Rs.21.50 on nearly 0.1 million shares.
"We advise investors to carefully select quality stocks in the market with a medium to longer investment horizon while seeking to avoid short term gains through investment in purely momentum counters. With 3Q2012 coming close to an end, it is important for investors to focus on stocks that are likely to have successfully warded off inflationary pressures and high interest rates and reported steady cash flows and robust bottomlines during the quarter. In this respect, we emphasize the need to concentrate on quality stocks in sectors such as food and beverage, leisure, diversified and banking that have strong brand loyalty and significant market share and are able to sustain margins under relatively high inflation conditions," DNH Financial said yesterday.
source - www.island.lk
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