The Colombo Stock Exchange yesterday took a blow from the SEC directive that forced selling of stock will be compulsory if settlement is not made within the five days of a transaction with effect from January 01 with both indices slumping sharply after the announcement but recovering quickly.
At the end of the day the All Share was down 32.79 points (0.49%) and the Milanka by 24.55 points (0.34%) with 114 decliners well ahead of 56 gainers.
"At one point soon after the announcement the All Share was down more than 90 points but quickly recovered thereafter," Prashan Fernando of Acuity Stockbrokers said. "The increase in government’s share transaction levy by 0.1% will also be effective from January 1."
He expressed the view that compelling share buyers to clear their accounts quickly was a positive sign for long term stability of the market although there was also a point of view among some brokers that lack of credit can be a market depressant.
Yesterday’s turnover of Rs.2.09 billion, up from the previous day’s Rs.1.5 billion, was supported mainly by Commercial Bank, Bairaha Farms, Distilleries, Three Acre Farms, Dialog and Grain Elevators.
Commercial Bank, the top turnover generator, with nearly 1.2 million shares traded between Rs.258 and Rs.261 closed Rs.2 down at Rs.260.50 contributing Rs.306.3 million to the business volume.
The poultry producers continued to fly with Bairaha up Rs.13.20 to Rs.299.90 trading between Rs.280 and Rs.304.90; Three Acres up Rs.4 to Rs.89.20 on nearly 1.1 million shares traded between Rs.80.10 and Rs.89.80 and Grains up Rs.2.80 to Rs.73 on over 1.1 million shares done between Rs.68.70 and Rs.75.30.
Distilleries continued to rise on investor hope that the refund of the purchase price paid for Sri Lanka Insurance will be settled shortly, brokers said. Although there was no confirmation of payment, the counter gained Rs.6.90 to close at Rs.178 on nearly 0.6 million shares.
Dialog saw nearly 7.3 million shares done closing 20 cents down at Rs.11.90 trading between Rs.11.70 and Rs.12.
Brokers said that most of ComBank was done on crossings at Rs.260. Five such crossings accounted for most of the trades.
Bairaha, Distilleries and Three Acre Farms were mostly retail driven with three crossings of Dialog at Rs.12 per share accounting for Rs.5.7 million of the shares transacted during the day.
The government’s share transaction levy moves up from 0.2% to 0.3% with effect from January 01 while other transaction charges (brokerage, CSE and CDS fees and SEC cess remains as they were. The total fee/cess will amount to 1.12% of transactions of up to Rs.50 million and 0.6125 for transactions over Rs.50 million.
The CSE will function as normal today (Friday).
source - www.island.lk
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