Thursday, September 22, 2011

Stocks at one-month low on forced selling; rupee flat

■     Month-end settlements push bourse to one-month low

■     Foreign investors’ net sellers of Rs. 40 m

■     Rupee flat despite heavy importer dollar demand

Sri Lanka’s stock market fell to a one-month low on Tuesday due to forced selling to meet margin debt reductions and month-end settlements with investors fearing a liquidity crunch, dealers said.

Reuters reported that the island nation’s main share index closed 0.62 per cent or 42.35 points weaker at 6,828.57, its lowest since 24 August. It is still Asia’s best performer with a return of 2.9 per cent on the year followed by Indonesia. “Prices dropped across the board to close the indices in red amidst profit-taking and forced selling,” NDB stockbrokers said in a research note.

The day’s turnover was Rs. 1.8 billion ($16.4 million), less than last year’s average of 2.4 billion and this year’s 2.7 billion.

The bourse witnessed a foreign outflow of Rs. 40 million on Tuesday, and thus far in 2011, offshore investors have sold 15.94 billion after a record 26.4 billion in 2010.  Tuesday’s total volume was 118.3 million, against a five-day average of 173.6 million. The 30-day and 90-day average trading volumes were 162.3 million and 142.4 million. Last year’s daily average was 67.9 million.  Arrenga Capital Research noted in a press statement that heavy institutional participation in Asian Alliance Insurance led the counter to register two crossings accumulating to 1.5 m shares seen dealt at Rs. 121 each.

This drove Asian Alliance to top the day’s turnover list with a 13.1% contribution, whilst also leading the price gainer’s list with a massive 49.5% appreciation to close at Rs. 187.3.

Investor chase continued in East West Properties leading the counter to witness high price volatility during trading. The counter hit an intra-day high of Rs. 44.4 (up 9.4%) during initial trading hours, however profit taking in the counter led it to close for the day at Rs. 40.2 (down 0.9%).

With the release of the strategic plan by Commercial Credit, indicating expected growth in its future profitability, the counter saw renewed investor participation registering a gain of 3.2% in its price.

Institutional activity in HVA Foods, led the counter to register two blocks carrying a total of one million shares being crossed off at Rs. 60 each.

Renewed institutional activity was evident in Expolanka Holdings as it witnessed a block of 2,753.5k shares being dealt at Rs. 12.6. Similar interest was evident in Commercial Bank and Citrus Leisure, leading the counters to register parcels of 182.6k and 300k shares each being transacted at Rs. 117.3 and Rs. 80 each respectively.

Furthermore, institutional participation re-emerged in Browns & Co. driving the counter to register a block 116.4k shares being crossed off at Rs. 275. Despite the lethargic run, SMB Leasing gained 3.6% with active retail interest whilst accumulation continued in heavy weight John Keells Holdings.

Kahawatte Plantations was seen among the gainers list with a 6.9% gain as it closed at Rs. 33.7 after seen 0.6 m shares in total being traded.

The rupee closed flat at 110.09/110.10 a dollar from Monday’s close as a state bank, through which the Central Bank directs the market, sold dollars at 110.10 despite importer dollar demand, a dealer said.

Dealers also said the Central Bank mopped up Rs. 20.67 billion from the market through a repo auction at 7.08 per cent, a day after it resumed repo auctions for the first time in two years, the Reuters report added.

source - www.ft.lk

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