Colombo bourse sinks as blue chips take a beating
2008-10-07 15:53:36

Colombo stocks including blue chips took a beating on Tuesday --- following in the footsteps of markets closer home collapsing from the global financial crisis amidst desperate attempts by Western government to prop it up --, with just nine companies showing gains across the trades.

Brokers said barring 34 which were unchanged, the balance of the 164 stocks traded, fell. The falling trends were seen in the morning on Tuesday amongst stocks like Maskeliya, Richard Pieris and John Keells Holdings (JKH). It worsened as the day progressed.

“The negative investor sentiment coupled with the wrong speculation on Maskeliya Plantations which was pushing the market towards the end of last week saw the stocks plunge today,” a stock analyst said. Another analyst said Dialog has hit an all-time low of Rs 9.50.

These trends came after India’s main benchmark stock index tumbled by nearly 6 % on Monday, its lowest in more than two years as global markets reeled from the crisis, Indian brokers said.
Maskeliya Plantations fell by 18.84 % or Rs. 6.50 to Rs 28 for a stock of 909,200 shares while Richard Pieiris & Co dropped by 75 cents to Rs 47 with 528,100 shares traded. JKH sank by 7.51% or Rs 6.50 to Rs 80 on 91,800 shares. A stock broker said that contrary to popular belief by the management, JKH share repurchase announcement by the company has not done any good to the share which saw a massive drop today. “This was the main reason for today’s market drop,” he said.

During the day, Maskeliya Plantations issued a statement saying they didn’t know of any reason why prices had risen sharply on Friday and yesterday but believe discussions on a possible divestment of Maskeliya’s management company may have triggered speculation in the stock. Earlier some of the gains came from hotel stocks like Galadari, Stafford Hotels, Serendib and Trans Asia.

The All Share Index fell by 48.01 points to 2,107.18 while the Milanka tumbled by 75.97 points to 2,342.73 at the close. Turnover jumped to Rs 248 million from a meagre Rs 51 million in the first half of the morning.