Central Finance soars to record Rs. 1,200

Wednesday, 23 March 2011 01:32 - - {{hitsCtrl.values.hits}}

Central Finance Plc yesterday saw its share price soar to Rs. 1,200 before closing at an all time high of Rs. 1,114.90, up by Rs. 186 or 20% from Monday.

The investor demand was following Perpetual Capital on Monday buying 9% stake in CF for Rs. 1.5 billion. The high price yesterday was however on a volume of 406,700 shares thereby generating a turnover of Rs. 420 million, the second highest for yesterday. CF’s previous best was Rs. 1,050.

Deals on CF as well as Ceylinco saw Banking, Finance and Insurance sector contributed significantly to the market turnover with the index up 3%. Guardian Capital Partners recorded exceptional gains once again despite the absence of a solid reason whilst LB Finance also made rapid gains.

"The indices recovered sharply (ASI and MPI up by 0.9% each) amid high activity levels (turnover of Rs. 3.6 billion) stimulated with sale of 11% of CINS voting shares along with buying interest centered on finance counters,” John Keells Stock Brokers said.

However NDB Stockbrokers headlined its report with a poser “An artificial push?.”

“Indices gained today amidst exceptional gains made by a few counters. The sudden rise in those stocks cannot be explained by fundamentals,” it added.

It also said investors reacted to some extent to Monday’s dividend announcement of Namunukula Plantations and Kotagala Plantations.

Reuters said the market closed firmer on Tuesday as retail investors bought select shares speculatively, shrugging off concern over rising oil prices due to turmoil in oil-producing Middle Eastern and North African countries.

Western powers continued air raids on the Libyan capital Tripoli as crude oil's benchmark front-month contract in New York settled at $102.33 a barrel on Monday, versus Friday's close of $101.07.

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.

Remittances from Sri Lankan workers overseas are the island nation's biggest source of foreign exchange, and tea is its largest agricultural export.

The day's turnover was 3.6 billion Sri Lanka rupees ($32.6 million), more than last year's average of 2.4 billion rupees and higher than this year's daily average of 3.3 billion.

Foreign investors were net sellers of 902 million rupees' worth of shares on Tuesday and have sold a net 5.7 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 8.8 percent gain, after bringing in the region's top return with 96 percent last year.

Traded share volume was 42.9 million, against a five-day average of 49.4 million. The 30-day and 90-day average trading volumes were 75 million and 69.1 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 14.8, one of the highest among emerging markets, compared with 12.8 in Asian markets and 11.3 in global emerging markets, Thomson Reuters StarMine data showed.

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