Red seems to be the dominating colour at the ATS terminals at the Colombo bourse! For the Chinese, red signifies prosperity and vibrancy but in Colombo ‘red’ indicates the doom and gloom because of the continuous downward direction at the bourse for the past seven or eight months, interspersed by a sudden jerk in the indices.
It was another week of bleeding at the bourse as indicated by the two indices. A combination of a surplus of IPOs, RIGHTS issues, strict credit control are among the causes for this predicament. The investors are also to blame because they were carried away by the advertising extravaganza, and the statements made covering the private placements. A few local fund managers regretted making investments in some of the recent IPOs in which there were private placements. Some are of the opinion that owing to many investors expressing disgust about the private placements, there was a temporary push up in the price of Expolanka early this week, which could be sustained.
It once again slumped to Rs.14.10. A similiar trend is visible in Softlogic which has still to achieve its IPO level. However Free Lanka Capital is down in the dumps at Rs.3.70 Vallibel One remains still on a winning note. These three stocks are traded in fair quantities along with Panasian Power, e-Channelling and Asian Hotels & Properties.
Following the market sentiment E B Creasy was down to Rs 1700 and Colombo Pharmacy down to Rs 1685 but J.L.Morison Son & Jones was at Rs 3550 while the Non Voting was up to Rs 2450.
From all accounts, general belief of the seasoned share market investors is that it is the end of the road for the new IPOs except for an extremely profitable company at a sensible price, not meant for the massacre of the innocents.
Commenting on the depressed situation at the bourse, K.C.Vignarajah a defender of minority shareholders, predicted that this state will prevail due to the actions of some controlling directors with tremendous cash reserves, insider trading and market manipulation. Forced selling is the other factor. As a remedy to restore some confidence to the market he suggests immediately that brokers be allowed credit to good clients and forced selling be curtailed.
In conclusion it may be a dream but sometimes dreams come true: There is talk that Sri Lanka Cricket will soon be listed in the CSE!!
A price band was imposed on Ceylon Leather Products Warrants W0012 from 21st to 27th July 201 while powerful businessman Dhammika Perera was been appointed Deputy Chairman with effect from 20th July 2011.
Following the discomfort in the trading, turnover for the week fell to Rs 6.7 billion as against Rs 8.3 billion last week. Both indices were shattered with the All share Index losing 240 points or 0.3% to close at 6537.25 while the Milanka was 281.38 points or 0.4% lower at 6029.75. |
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