Business Times

Colombo bourse tests resistance levels

Stockmarket Review
By Elton R. Ebert

The Colombo bourse was in the discomfort zone at the beginning of the week when the All Share Index stagnated at the 6700 mark. This was closely tracked by chart analysts who said that there was an element of resistance at this point. The ASI staged a recovery on Thursday which was followed up the next day which also is the end of the third quarter. Some attribute the revival of the market due to this factor.

The pattern of trading during the week ahead may be indicative of the path of the ASI for the future. One may recall that the ASI visited the 7000 barrier early in the month but did not pass this hurdle. Besides the investors who went in for the recent IPOs many company directors are also eagerly hoping for a revival in the market so that they could push out their IPOs.

Activity at the bourse was on a quiet tone as depicted by the weekly turnover except for extraordinary activity in certain stocks that accelerated last week. This positive trend was extended this week also. Asian Alliance Insurance which is now under the Softlogic Group proved to be a glamour stock when it continued its escalation after a temporary halt. It was at Rs 350.60 on Thursday but heated up to Rs 384.70 the next day ending the week at Rs 354. For the record, the Richard Pieris Group accepted the (Asian Alliance) mandatory offer of Rs 120 earlier. This stock seems to hop in and out of the price band.
The hyper activity in Regnis continued this week too. On Thursday the share closed at Rs 420.30 and extended its winning sequence to reach a peak level of Rs 449 before ending at Rs 440.20. Ascot Holdings moved into the hot spot once again with a massive three million shares been transacted on Thursday when it closed at Rs 188.90 but rose further on Friday to reach a peak level of Rs 207.70 and then went in for a mild erosion.

Other noteworthy prices were that of Nuwara Eliya Hotels which closed at Rs 1750, and Lanka Milk Foods which reached Rs 140 before cooling off to Rs 129.20 on Friday. Nuwara Eliya Hotels paid an interim dividend of Rs 5 on 25th May 2011.

Capital Alliance Finance will commence trading on 4th October 2011, while Trade Finance & Investments Ltd was oversubscribed on Wednesday. Heavy activity continued in Renuka Agri Foods, Panasian Power, e-Chanelling and Blue Diamonds voting and Non voting shares. The other interesting price movements were noticed in Shaw Wallace which moved up to Rs 410 and Hunters at Rs 777.70.

DIRECTORS - Asian Alliance Insurance PLC: Mohan Ray Abeywardena was appointed Director on 28th September 2011 (pending approval of the Insurance Board of Sri Lanka); Sampath Bank PLC - G.L.H. Premaratne, Managing Director will resign on 31st December 2011 being the end of his contract; M.Y.A.Perera, Deputy Managing Director will be appointed Managing Director on 1st January 2012; Kandy Hotels Co (1938) PLC - Colvin Lakshman Sirimanne was appointed a Director on 27th September 2011; Lankem Developments PLC - N.H.B.S. Perera was appointed an independent Non Executive Director on 30th September 2011.

The turnover for the week registered Rs 9.5 billion as against Rs 6.8 billion last week. Both indices improved towards the end of the week gaining marginally over last week. The All Share Price Index was 48.95 points or 0.02% higher at 6783.55, while the Milanka was 21.18 or 0.01% up at 6045.11.

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