The week commenced on a bad note when the ATS at the Colombo bourse ran into difficulties a few minutes after trading activities got underway. The few transactions which were effected were cancelled, and for the first time there was no trading during the whole day. This caused many problems and various comments were made by brokers and investors some of which are unprintable.
There were a few heated verbal exchanges between some clients and brokers. It was stated that a few of the clients who were badly let down due to the spate of forced selling were most vociferous. In this instance, the problem was the malfunctioning of the ATS in the Colombo Stock Exchange and not the brokers.
Global stock markets have tumbled due to fear of slipping back into recession. This factor plus a combination of other factors seem to be pushing down the indices. A further decline would see the emergence of the resistance level which would mean the return of a host of bargain hunters. The ASI, on the decline for the whole week, ended at 6734. Many are curious to see at which point there should be some resistance.
Moving away from this depressing tone we have some constructive news coming from the NDB which is moving into an investment banking alliance with DBS Bank of Singapore, and with the focus on sectors like infrastructure, telecom, power and tourism, should prove beneficial in due course. The share price of the NDB had a marginal gain immediately after the announcement.
The Finance Co witnessed a temporary surge on Wednesday due to a transaction between two high profile players at the bourse. Around 8 million Voting shares and 2 million Non Voting shares were transacted, the closing levels being Rs.45.40 and Rs.15.90, respectively. Both categories, however, contracted as the week progressed.
Commercial Credit which reported very encouraging earnings recently came in for extra market support on Tuesday when transactions were effected in excess of 2 million shares and at enhanced levels. The two insurance companies - Ceylinco Insurance and Asian Alliance Insurance which is now controlled by Softlogic Capital were on a steady upside.
Softlogic Capital which had a reference price of Rs.40 commenced trading on Wednesday when over one million shares was traded. It rose to Rs 75 but began to pull back immediately afterwards. Softlogic Holdings which is now on the main board was also on the decline. The closing levels were Rs 43 and Rs 22, respectively.
Also drawing attention was the heavy dealings in Lanka Orix Finance Co, in which a solitary deal of 52 million shares at Rs 12 was transacted on Thursday. Some are speculating that the seller was a fund based in India.
In the manufacturing sector, Regnis went on the overdrive on Thursday when dealings in excess of 800,000 shares were traded reaching a peak level of Rs 290 before closing for the day at Rs 275. There was a further hike the next day as it reached Rs 315,but closed for the week at Rs 303.70. Capital Alliance Finance have got approval for the listing on the Diri Savi board 33,920.282 ordinary shares.
PRICE BANDS: - Was imposed on Asian Alliance Insurance PLC from 21st to 27th September. It was removed from Muller & Phipps on Thursday.
The turnover for the four days was Rs 6.8 billion against Rs 10.2 billion last week. Both indices were in negative territory, the All Share Price losing 136.32 points or o.1% to end at 6734.60 while the Milanka was also 185.31 or 0.2% lower at 6023.93