Business Times

Is a market recovery on the horizon......?

Colombo Stockmarket Review
By Elton R. Ebert

Initial Public Offerings, RIGHTS issues and now Debentures have become the latest vehicles to capture whatever available funds for investment. LOLC unlisted debentures, Abans Financial Services listed debentures and DFCC Vardhana Bank are in the forefont while many more issues are lined up.
This is a worrying for the stock market which is on a very uncomfortable perch at present. The indices remained stagnant at these levels for the past few weeks surprising many analysts, inspite of the many seminars workshops held in many provinces, and so many TV programmes. Investors say this leads many to ask what's wrong and why?

As was predicted the 80 million share issue of Textured Jersey Lanka Ltd closed on day one itself being many times oversubscribed. In a display of efficiency and speed covering procedural matters, Vallibel One commenced trading on Friday. It created a much needed boost to the investors who were able to secure a substantial profit of 52% when it commenced trading at Rs. 38. A hefty 42 million shares were transacted on its debut. This also erased the bad taste left by the failure of earlier debut issues like Free Lanka Capital and Expolanka to give a fair return to its subscribers. The former ended the week at Rs 4.20, and the latter at Rs.13.70. If Softlogic, which is expected to trade soon, starts at a good price, many will be satisfied. Trading in these two stocks, and their refunds meaning more capital in the hands of the investors may help the market to recover and recoup some of its earlier losses.

JKH which is now trading after its sub division, was in heavy demand after a long spell. Lanka Orix Finance created a storm on Thursday at its initial trading when a near 18 million shares were transacted, its highest price being Rs.22.50 while the newly quoted Associated Motor Finance rose to Rs 674.30 the same day. However this company extended its winning sequence to Rs 721 the next day while Lanka Orix moved in the opposite direction. Among the high priced stocks, J.L.Morison was at Rs.4,000, non voting at Rs 2,999 and Colombo Pharmacy at Rs.2,100.

There was good demand also for Panasian Power, e-Chanelling, Orient Garments and Expolanka where foreign interest was noticed. PRICE BANDS - The Price Band was imposed on Onally Holdings from 6th July to 12th July. It was removed from Alufab on Friday.

A lower turnover was recorded when compared to last week; Rs 8.2 billion as against Rs 10.4 billion. The indices were however fractionally higher. The All Share Price was 67.11 points or 0.9% higher at 6911.98 while the Milanka Index was 42.54 or 0.6% better at 6386.97.

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