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Friday, June 17, 2011

Realistic bourse!

By Jithendra Antonio

Once top performed Colombo Stock Market’s All Share Price Index (ASPI) crashed back to 7,000 points for the second time during this year, exposing the realistic picture through corrective measures. Colombo Stock Market once was poised to hit the 10, 000 market.

With a turnover of Rs.2.21 billion, Colombo’s All Share Price Index (ASPI) yesterday fell 0.95% to close at 7,015.71 points and Milanka Price Index (MPI) further dipped 1.02% to close at 6,569.40 points.

Expressing views on bourse’s recent fall, Chief Executive Officer of Richard Pieris Securities Jayantha Perera said, though the market needs both speculators and fundamental investors, it had been taken for a quicker ride by speculative investors in recent times.

“Fundamentals have not changed. There have been many speculations and it could be described as a quicker speculative drive” Perera said adding that amid this bad state of the market, several investors had burned their fingers hunting in to stocks that were booming last three weeks.

Though it may take a long period for the market to perform well, a number of new investors and foreign funds will infuse new capital to Colombo stocks, in spite of recent falls in both All Share and Milanka price indices, and the drop in the overall Price to forward Earnings Ratio.

On the contrary, Chief Executive Officer of Heraymila Securities Ravi Abeysuriya said the recent IPOs had suck up liquidity from the market, and the market may continue to fall during the coming weeks. Hence, Colombo stocks will further expose realistic valuations.

“I think the stocks that were pushed up by manipulators and punters tumbled mainly. But overall, the panic selling in certain counters affected the blue chip counters as well” a top analyst pointed out.

“It may be margin calls as well as several other factors” he added.

Meanwhile another analyst from the Unit Trust industry said that several investors have been recently following bargain hunters and had got stuck with ‘junk penny stocks’, and as a result the overall market had fallen. “All this has happened due to excessive punting. There is no liquidity at all” he said. Several stocks including Heladiv Foods (HVA), Expolanka (EXPO), Free Lanka Capital Holdings (FLCH) fell below the IPO price to Rs.15.50, Rs.12.50 and Rs.4.50 respectively. Several other stocks also fell to a 52 weeks-low including Environmental Resources (GREG), Ceylon Leather Products (CLPL) and Colombo Fort Land & Building Development Company PLC (CFLB). There were 57 listed gainers and 154 listed losers during the day. Bimputh Lanka Investments (BLI) was the highest gainer, rising over 49.86% to close at Rs.54.70 (up by Rs.18.20). However, only 30,800 shares changed hands. Nearly 25.13 million Blue Diamonds voting shares were traded whilst the share price rose as high as Rs.8.90 and closed at Rs.8.60 (up 13.1%).

source - www.dailymirror.lk