Ace play on ASCOT, Asian Alliance triggers regulatory check

Friday, 30 September 2011 05:11 -     - {{hitsCtrl.values.hits}}

Hectic trading on and sharp rise in share prices of Asian Cotton Mills and Asian Alliance Insurance yesterday dominated the Colombo Bourse triggering regulatory action.

The duo accounted for 27% or Rs. 771 million of the day’s turnover of Rs. 2.8 billion and topped the list of gainers. Their meteoric rise landed both under the SEC’s price band. For Asian Alliance it was a repeat after being released from its first ever price band on Tuesday.

ASCOT saw over 3 million of its shares traded before closing at Rs. 188.90 (up 45.3%) after hitting a 52-week high of Rs. 196.30. Asian Alliance saw only 0.78 million shares traded but rose by Rs. 116.80 or 50% to close at Rs. 350.60 which was its highest as well.

Both stocks net asset value are fraction of the prices at which they are currently trading. Play by high networth investors triggered a retail rally, analysts said. Some even suspected a pump and dump scenario but this could only be confirmed if the parties concerned had sold mid-way.

The blind and speculative play on these stocks were midst the more fundamental shares remaining depressed relatively though some lost early gains at close of trading.

Overall the All Share Index posted a welcome gain of 0.5% whilst Milanka was almost flat.

“Renewed interest in speculative stocks was witnessed while Ascot Holdings helped boost the turnover. Institutional or high networth investor participation was rejuvenated to a certain extent,” NDB Stockbrokers said.

Interest was witnessed in Regnis (Lanka) and Radiant Gems.

 The share price of Regnis (Lanka) increased by Rs.23.40 (5.90%) and closed at Rs. 420.30.

Foreigners continued to be net sellers with foreign selling worth of Rs. 221.39 million whilst foreign

buying was only Rs. 87.3 million, resulting in a net foreign outflow of Rs. 134 million.

“Retail involvement in the less liquid counters continued to heighten with today’s trading being mostly taken up by the speculative counters taking the lead in terms of turnover whilst dominating the price gainers’ assemblage with new levels of 52-week highs,” Arrenga Capital said.

Heavy index, John Keells Holdings registered two crossings counting to 373,400 shares in total with each block being crossed off at Rs. 205.0 and Rs. 207.9 price levels. Accumulation was evident in Vallibel One as it saw a parcel containing 2.9mn shares being dealt at Rs. 27.4. Other finance sector players, Ceylinco Insurance too witnessed a parcel of 137,000 shares being traded at Rs. 780 with Union Bank registering a one million block at Rs. 22.0.

“Despite the few large deals drawn on the fundamentally steady counters, prices of such counters registered dips,” Arrenga added. Citrus Leisure along with its Warrant 0017 continued to see some interest with Convenience Foods continuing to register a further gain of 8.3%.