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Tuesday, September 6, 2011

Penny stocks drive up bourse

Mountainous volume of shares traded Monday
Blue Diamond slapped with price band after leading in terms of volume, turnove

September 5, 2011, 8:30 pm

The Colombo Stock Exchange closed on positive territory on Monday with both indices gaining on heavy retail activity across the board, particularly on penny stocks with three counters being slapped with the price band on account of volatile price movements, brokers said.

The All Share Price Index closed 0.68 percent higher, gaining 47.42 points to reach 6,998.03 while the Milanka Price index of more liquid stocks rose 0.47 percent to close at 6,326.91, up 29.79 points.

Turnover reached Rs. 4.4 billion with a little more than 715 million shares changing hands during the day which saw 114 counters close in the positive territory against 91 counters which closed in the red.

Hayleys PLC made a mandatory offer to purchase shares of Amaya Leisure PLC at Rs. 107 per share. Last week the conglomerate and its associates acquired a 51 percent stake in the hotel stock.

Price bands were slapped on Blue Diamonds Jewellery Worldwide PLC (BLUE-X-0000), E-channeling PLC (ECL-N-0000) and SMB Leasing PLC (SEMB-W-0016) which would be lifted only after September 12.

"The upsurge was triggered by heavy interest evident on penny stocks," Bartleet Mallory Stockbrokers commented on Monday trading. "The day saw a mountainous volume of 715 million shares as a result of heavy interest on penny stocks."

"The Week started off with the indices gaining while speculative stocks continued to attract investors. However, institutional and high net-worth investor participation helped post a healthy turnover. The hotel sector was also on the up," NDB Stockbrokers said.

BLUE-X which was caught in the price band was the most traded stock with 173.6 million shares changing hands. It closed at Rs. 6.10 to be biggest gainer as well, up 59.46 percent. Turnover-wise, too this stock generated the biggest share at Rs. 905.6 million.

Colonial Motors PLC generated a turnover of Rs. 362.9 million on profit taking to be the second highest contributor, with the share closing at Rs. 471, down 0.59 percent. This counter saw a crossing of 202,500 shares at Rs. 481 each.

Three other crossings were seen during the day; Chevron Lubricants Lanka PLC 842 thousand shares ranging at Rs. 165.20 and 165.30 each, Bukit Darah PLC 25 thousand shares at Rs. 1,070 each and Hemas Power PLC at Rs. 36.50 for 550 thousand shares.

NDB Stockbroker said there was renewed interest in Browns Investments PLC and Dolphin Hotels PLC.

source - www.island.lk