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Thursday, December 9, 2010

Laugfs sparks

December 9, 2010 @ 1:29 am

    * On debut voting share soars by 35% before closing up 15.2% or Rs. 3.50 to Rs. 26.50
    * 41% of IPO volume and 9% of issued shares trade on opening day
    * Bear run persists at Colombo bourse

Laugfs Gas Ltd., (LGL) yesterday had a commendable debut with the price of its voting shares soaring by 35% before closing up 15% though the market failed to be enlightened as bear run continues.

The new kid on the CSE opened trading at Rs. 31, which was the day’s highest reflecting a 35% increase from its IPO price of Rs. 23. With 30.8 million shares changing hands via 10,283 trades, Laugfs finished its debut trading up by 15% or Rs. 3.50 to close at Rs. 26.50. The number of voting shares traded accounted for 41% of the offered amount via IPO and 9% of the overall voting shares.

Deals on Laugfs amounted to Rs. 821 million, or nearly half of the day’s turnover.

Analysts said that there wasn’t unloading of Laugfs shares by big investors but it was under active play by retailers.

The overall Rs. 2.5 billion IPO of Laugfs sparked a record demand of Rs. 42.3 billion. Its non-voting shares offered at Rs. 15 each will debut today.

The voting share peak price of Rs. 31 lived up to the expectations of most though some feared it will trade much lower given the depressed sentiments in the market.

Nevertheless Laugfs debut failed to energise a rally in the market as the bear run persist. Both indices dipped yesterday though marginally.

NDB Stockbrokers lamented saying weak sentiment negated the IPO optimism. “Indices edged down slightly as blue chip companies have not been able to draw the attention of the buyers yet. Weak sentiment continued despite the commencement of trading of Laugfs Gas,” it said.

Power & Energy and Bank Finance & Insurance sectors were the highest contributors to the market turnover. Power & Energy sector index increased by 2.63% while Bank Finance & Insurance sector index decreased by 0.58%.

Tokyo Cement-(X) also contributed significantly to the market turnover while the share price increased by Rs 1.70 (4.67%) and closed at Rs. 38.

Two crossings were recorded for 175,000 shares of John Keells Holdings at Rs. 290 and 100,000 shares of Ceylon Tobacco at Rs. 365.

Asia Securities said the Bourse loss ground despite the long awaited Laugfs Gas initiated trading. It also said Tokyo Cement (Non Voting) gained 4.7% on the back of institutional and high net worth interest. Institutional and high net worth participation was evident in John Keells Holdings and Tokyo Cement (Voting) which witnessed renewed investor interest. Further Retail investors were seen active in Ceylinco Insurance, Asia Securities added.

NDB Stockbrokers said Asian stock markets ended mostly lower with exporters pushing the Nikkei up 0.9%. European stocks are modestly lower, losing some of their recent gains as investors continued to worry about euro-zone sovereign debt contagion. FTSE 100 was down 0.5%

source - www.ft.lk