Two regulatory directions from the SEC yesterday – one requiring brokers not to extend credit beyond T + 3 (three days after a transaction) except through a registered margin provider and the other lifting the 10% price band on share price movements from Monday – sent the Colombo bourse first down and then up, brokers said.
``The market was flying with the All Share Price Index up 90 points when the first directive was announced shortly after 10.30 a.m.,’’ Prashan Fernando of Acuity Stock Brokers said. ``That sent it down sharply but the depression didn’t last long. When the price band removal was made known, it recovered quickly.’’
At the end of the day, the ASPI was up 63.4 points (1.03%) while the Milanka gained 36.45 points (0.56%) on a turnover of Rs. 3.96 billion, slightly up from the previous day’s 3.86 billion with 104 decliners ahead of 73 gainers according to CSE figures.
Fernando expressed the view that the credit restrictions being imposed was a good thing, straightening up the system, although it did send instant ``shockwaves’’ through the retail segment of the market.
``There was first some uncertainty and negativity but that did not last long. The announcement that the price band was being lifted was a good tonic.’’
Brokers said that many banking stocks moved up following the regulatory measure restricting credit to share traders to registered margin providers among whom NTB is believed to be the biggest.
``The NTB share went up from Rs. 66 to Rs. 76,’’ a broker said. ``Other banking stock too gained, with ComBank being the big rupee gainer although it’s not a margin provider.’’
Reefcomber led the turnover league generating Rs. 242.8 million of the day’s business volume with 17.9 million shares traded between Rs. 11.70 and Rs. 13.80 gaining Rs. 1.20 to close at Rs. 13.80.
ComBank followed, gaining Rs. 9.70 to close at Rs. 219.50 on a million shares done between Rs. 210 and Rs. 220. Distilleries was third in turnover terms, although the counter lost Rs. 3.50 to close at Rs. 180 on over a million shares traded between Rs. 173 and Rs. 187.
Losers among the blue chips included JKH, down two rupees to close at Rs. 287 on 0.6 million shares traded between Rs. 280 and Rs. 291.70.
Other gainers among the banking stock included Sampath, up Rs. 5.10 to close at Rs. 408 on 0.4 mn. shares, NTB up Rs. 6.90 to Rs. 76.40 on 1.8 mn. shares, DFCC up Rs. 0.60 to close at Rs. 330.80 on nearly 0.3 mn. shares, Seylan Bank and Seylan X.
There was considerable interest in low priced stock like Dialog and Glass with Dialog gaining 20 cents on over nine million shares and Glass gaining 30 cents on nearly 22.1 million shares.
Carsons announced that it will not be selling Watapota Iinvestments as a clutch of bidders, seeking what one analyst called ``a back door entry’’ to a CSE listing, vyed to buy a shell company holding only some cash assets and nothing else.
source - www.island.lk
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