LB Finance’s rise persists, CF dips on profit taking

LB Finance saw its sudden rise continuing for the third consecutive day whilst Central Finance dipped on profit taking as the market witnessed further dominance by financial sector stocks.

Deals involving 2.2 million shares of LB Finance accounted for the highest turnover of Rs. 421.4 million yesterday as its share price closed up Rs. 19.50 to Rs. 189.10 after a touching an intra-day high of Rs. 198. In comparison to Rs. 140.50 closing of last week, yesterday’s peak reflects an increase of Rs. 57.50 or 41%. On Tuesday it gained by Rs. 33.60 on a volume of 1.4 million shares.

Some analysts linked the rebound in banking and finance sector stocks following Perpetual Capital’s Rs.1.5 billion investment to acquire 9% stake in Central Finance at Rs. 800 per share. CF on Tuesday peaked to an all time high of Rs. 1,200 but profit taking yesterday brought it down to Rs. 1,105.80 lower by Rs. 10.10 from Tuesday. However yesterday’s dip was after CF established a new high of Rs. 1,300.

Banking, Finance and Insurance sector contributed the highest turnover of Rs. 1.3 billion yesterday whilst the sector’s price index rose by 3% despite profit taking.

NDB Stockbrokers said most stocks made gains led by the price appreciations seen from yesterday in Central Finance and LB Finance. It could be the Bull Run expected up to the FY end in 31st March. MPI recorded a welcome gain.

“The ASPI declined marginally despite sustained buying across the board while heavy interest was evident on finance sector counters,” John Keells Stock Brokers added.

NDB also said manufacturing sector also contributed to the market turnover amidst renewed interest witnessed in Royal Ceramics. The sector index increased by 0.78%.

“Aggressive retail participation was witnessed in Guardian Capital towards the closure of the market. Marginal decline in ASPI was due to the drastic drop in the share price, as the new shares started trading (subsequent to the rights issue). The share is still overvalued in our opinion,” it added.

Reuters said market fell on Wednesday as investors booked profits in financial shares after a recent rally but amid negative sentiment over rising oil prices due to turmoil in oil-producing Middle Eastern and North African countries.

The island’s main share index closed 0.18 percent or 13.16 points weaker at 7,207.10, mainly due to a fall in financial and insurance shares. It hit a record closing high of 7,811.82 on 14 February.

Oil steadied on Wednesday due to concerns that unrest in Yemen may spill over into neighbouring countries in the oil rich Middle East Gulf region amid Western powers continued attack in Libya.

Brent crude futures rose 9 cents to $115.76 a barrel at 0855 GMT. Prices have risen four out of the past five sessions but fallen from the near $120 hit in late February.

Sri Lanka imports all its oil, so the crises in Libya and the Middle East mean the island nation’s economy could get hit by soaring imported inflation and a loss of earnings from Sri Lankan expatriate workers and lower tea demand from the region.

The day’s turnover was 2.97 billion Sri Lanka rupees ($26.9 million), more than last year’s average of 2.4 billion rupees and less than this year’s daily average of 3.3 billion.

Foreign investors were net sellers of 369 million rupees’ worth of shares on Wednesday and have sold a net 6.1 billion in 2011, after selling a record net 26.4 billion in 2010.

The bourse is Asia’s best performer so far in 2011 with an 8.6 percent gain, after bringing in the region’s best return with 96 percent last year.

Traded share volume was 49.6 million, against a five-day average of 52.7 million. The 30-day and 90-day average trading volumes were 72.1 million and 68.3 million respectively. Last year’s daily average volume was 67.9 million.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 14.7, one of the highest among emerging markets, compared with 12.2 in Asian markets and 11.4 in global emerging markets, Thomson Reuters StarMine data showed.

The rupee closed flat at 110.38/40 a dollar despite severe importer dollar demand as a state bank sold dollars at a flat rate of 110.40, dealers said.

Master Divers divests 4% stake in Pelwatte for cash

CONTROLLING shareholder Master Divers Ltd., of Ari Wickramanayake fame on Tuesday divested 4% stake in Pelwatte Sugar Industries.

The stake amounting to 2.66 million shares had been sold between Rs. 37.10 and Rs. 40.10 per share.

The same day 5.8 million shares or 8.6% stake traded between a high of Rs. 44.50 and a low of Rs. 35.40 before closing at Rs. 38.50, up by Rs. 2.80.

Yesterday only 0.4 million shares traded before closing at Rs. 36.70, down by Rs. 1.80.

As at 31 December, 2010, Master Divers held 81.74% and Wickramanayake owned 3.2% stake.

Nimal, Dilith figure in 12.5% stake buy of ASCOT

HIGH net worth individual investors Nimal Perera and Dilith Jayaweera had figured in deal amounting to 12.5% stake in Asian Cotton Mills (ASCOT Holdings) last week whilst the share rose to a high of Rs. 102.80 yesterday.

On Friday ASOCT’s controlling shareholder Axis Financial Services Ltd., divested 12.5% stake amounting to 1 million shares at Rs. 100 each and in the process brought its stake down to 41.4%.

Sources said the 12.5% block was shared by Nimal, Dilith and another investor.

Whilst the stock dipped on Wednesday by Rs.2.50, it gained yesterday by Rs. 1.20 to close at Rs. 98 whilst all time high of ASCOT is Rs. 108.50.

Axis Financial Services recently ventured into stock broking following the receipt of licence from the SEC whilst Daily FT learns it will expand in financial service sector with another venture shortly.