Colombo corrects itself

Wednesday, 16 February 2011 00:49 -     - {{hitsCtrl.values.hits}}

Carson’s stars fall

The Colombo stock market yesterday succeeded in correcting itself after booming to dizzy heights on Monday as well as during the early part of morning trading.

The All Share Index dipped by 2.6% whilst Milanka performed the usual way amidst market turnover of Rs. 4.4 billion. Yesterday’s fall was the highest since 12 October led by high cap palm oil shares which had a bull run previously.

“Indices dipped sharply during early trading with corrections made on counters which experienced a sudden appreciation on Monday,” NDB Stockbrokers said.

However, buying pressure was witnessed in counters such as Lankem Ceylon, HVA and some Motor sector stocks, it added.

Recent high flyer Bukit Darah dipped by Rs. 206.40 to close at Rs. 1,333.80 whilst related party Carson’s fell by Rs. 65.10 to Rs. 664.70 though they remained number two and three most valuable stocks behind the solid JKH, which saw its share price gain by Rs. 1.10 to close at Rs. 293.30.

Several other Bukit/Carson Group companies such as Indo Malay, Good Hope, Shalimar, Ceylon Guardian, which enjoyed gains on Monday, closed lower yesterday and figured among top 10 losers list percentagewise. Guardian Capital (formerly Watapota) however gained once again yesterday by Rs. 200 to close at Rs. 8,950 with just 400 shares traded.

Beverage, Food & Tobacco and Motor sectors were the highest contributors to the market turnover while indices decreased by 0.34% and 2.99% respectively.

Ceylon Tea Services made the highest contribution to the market turnover while the share price decreased by Rs. 150.00 (18.75%) and closed at Rs. 650. Foreign holding of the company dipped by 1.45 million shares.

Reuters said market fell as investors booked profit profits in large-cap palm oil shares that surged on booming Malaysian palm oil prices.

It quoted analysts as saying low-volume profit-taking was seen after speculative trading in oil palm-related shares in the past three sessions with conglomerates Bukit Darah and Carson Cumberbatch falling 13.4% and 24.6% respectively.

Bukit Darah posted a 51% rise in net profit for the December quarter, while Carson’s said its net profit fell 1% in the same quarter.

Foreign investors sold a net Rs. 1.1 billion shares on Tuesday, extending the total net foreign outflow to Rs. 6 billion so far in 2011, after selling a record net Rs. 26.4 billion in 2010.

The bourse has still been Asia’s best performer with a 14.7% gain in 2011 after cinching the region’s top spot with a 96% return last year. Heavy retail buying has pushed it deeper into the overbought region with the 14-day relative strength index at 70.9.

Traded share volume was 79.1 million, against a five-day average of 96.7 million. The 30-day and 90-day average trading volumes were 160.8 million and 69.4 million respectively. Last year’s daily average volume was 69.2 million.

The bourse is trading at a forward price-to-earnings ratio of 16.7, one of the highest among emerging markets, compared with 13 in Asian markets and 11.9 in global emerging markets, Thomson Reuters StarMine data showed.

The rupee edged up to 110.99/111.01 a dollar from Monday’s 111.08/.10 as the Central Bank reduced its dollar trading band by 10 cents to 110.40/111.00, dealers said.

HVA shares brew the perfect start

  • Rs. 16 IPO shares peak to Rs. 29 before settling a Rs. 26.30, up by Rs. 10.30 or 64% on debut
  • 19.9 m shares or 30% stake equal to IPO offering changes hands via 10,000 trades

HVA Foods Ltd. brewed a perfect debut at the Colombo stock market yesterday with a hefty increase in value on top of brisk trading.

The company’s shares, which were offered at Rs. 16 in the IPO, began trading straight at Rs. 24 and then peaked to Rs. 29 before closing at Rs. 26.30, up by a massive Rs. 10.30 or 64.4%.

Around 19.9 million shares changed hands via 10,000 trades, generating a turnover of Rs. 517.2 million.

Incidentally, HVA offered 19.9 million shares or a 30% stake via the IPO. All subscribers to the IPO got a minimum of 200 shares only after the Rs. 319 million issue drew demand worth Rs. 7.4 billion.

Analysts said HVA performed best on debut and there was widespread demand from retailers as well as institutional investors.

“HVA left a refreshing taste in the market, which otherwise was chaotic as it corrected itself from the dizzy heights of Monday,” they added.