Profit taking drags Bourse down

Friday, 27 May 2011 01:19 - - {{hitsCtrl.values.hits}}

PROFIT taking by investors saw the Colombo stock market dip marginally whilst turnover remained healthy.

The benchmark ASI dipped by 27 points to its lowest since 16 May and Milanka by 13 points.

Investor activity was high with Rs. 3.6 billion turnover generated, slightly low from Rs. 3.9 billion on Wednesday.

Foreign investors turned net buyers to the tune of Rs. 41.6 million.

“The indices dipped on selling pressure amid high turnover while foreign participation on JKH was evident,” John Keells Stock Brokers said.

Some degree of sell was seen on the Land and Property sector narrowing its 14% gain up until Wednesday. However a select few stocks in the sector gained in price.

Reuters said stock market fell as investors cashed in their stakes to apply for the upcoming Softlogic IPO, the nation’s largest in six years, while the rupee edged up after the Central Bank lowered the trading band.

Mostly retail investors sold shares to be liquid ahead of the highly-anticipated Softlogic initial public offering, while other investors have already locked in conglomerate ExpoLanka’s IPO, which was subscribed by 4.5 times.

Swarnamahal Financial Services and Chilaw Finance started trading on Thursday after being listed via introduction instead of IPO, and jumped over 285 percent and 178 percent respectively.

The day’s turnover was 3.61 billion Sri Lanka rupees ($32.8 million), more than last year’s average of 2.4 billion and this year’s daily average of 2.83 billion.

Foreign investors were net buyers for 41.7 million rupees’ worth of shares on Thursday. But they have sold a net 6.3 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

Traded volume was 167.2 million against a five-day average of 153.5 million. The 30-day and 90-day average trading volumes were 77.2 million and 100 million respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with an 11.8 percent gain, after bringing in the region’s top return of 96 percent last year.

The rupee edged up to 109.85/90 a dollar from Wednesday’s 109.97/110.00 as the Central Bank narrowed the dollar trading band by 10 cents to 109.50/90 in line with global greenback depreciation amid heavy importer demand, dealers said.