Trading activities commenced on Tuesday after the Thai Pongal holiday with the relaxation of restrictions on brokers credit setting trading at a blistering pace. Within an hour the ASI had gained over 100 points, passing the 6000 mark, but surprising this proved to be a temporary bubble and the market closed for the day even lower than the previous day.
Most investors expected the market to stage a revival the next day but on the contrary it reverted to the old losing style.
It continued to fall for most of the week with the ASI slipping to 5782 and the Milanka just above the 4900 mark on reasonable turnover.
Some attribute the paranoia in the market to the fact that the SEC has resumed its investigations while sending letters a few brokers and investors as the main factor among many others.
The only bright spark in this depressed and weak situation was the extraordinary and unbelievable enthusiasm for Asia Asset Finance which extended the hyperactivity of last week. It escalated to Rs. 8.90 on Wednesday and retreated gradually but had a host of buyers for the whole of the week. This stock experienced a new wave of activity on Friday when another 23 million shares were sold, peaking to Rs.8.70, before closing for the week at Rs.6.20.
This is very much in contrast to IPOs like Expolanka, Free Lanka Capital and Textured Jersey which dropped deep into the mire this week. Expolanka was exposed to its lowest level of Rs.8 and Textured Jersey slumped to Rs.9. Softlogic Holdings which is now moving into the leisure sector as stated below, Browns Investments and People’s Leasing are a cause of heartburn for many at present. PC Pharma also created an interesting plateau when it raced to Rs 89 on debut. Fair activity was seen in this share and it closed for the week at Rs. 52.
Commercial Bank and Environmental Resources Investments were transacted in large quantities like in the previous week. Ceylon Tobacco which reached Rs.500 per share also helped to bloat the weekly turnover.
Of late there have many strategic expansionary deals inked. Ceylon Leather Products now under Environmental Resources Investments acquired a 60% stake in Palla & Co (Pvt) Ltd, one of the leading footwear exporters for Rs 418 million. Meanwhile an agreement was worked out for a joint venture between JK Holdings and Brandix from the apparel industry for a domestic aviation project. Targetting the leisure industry, Softlogic Holdings entered into a shareholders agreement with UAE-based Ominga International (Pvt) Ltd for the construction of a luxury resort with 40 rooms and 20 luxury villas in Pasikudah. Renuka Agrifoods which enjoys fair market demand at the bourse, is expected to assume a 76% stake in Richlife Dairies Ltd, manufacturers of dairy and fruit based consumer products. Blue Diamonds Jewellery PLC in which there is heavy dealing and fair fluctuation, together with ECL Soft (Pvt) Ltd, a subsidiary of e.Channelling PLC has incorporated a subsidiary in Singapore to carry out retail business including Internet sales in addition to supplying key buyers. However the price of Blue Diamonds remained at previous levels.
AgStar Fertilizer Ltd, is arranging for a listing by way of an introduction on the Diri Savi board of 307,526,310 ordinary voting shares and 17,473,690 non-voting shares.
Changes in directorates: Hatton National Bank – Harry Jayawardena vacated his office as director after completion his term of office effective 31st December 201; Mercantile Investments - Ms Mignonne Bernadette Assauw resigned from the board of directors effective 13th January 2012 while Ms Punyakanthi Tikiri Kumari Navaratne was appointed an independent Non Executive Director on 17th January 2012; Senkadagala Finance - Chandra Lal De Alwis was appointed Chairman and director on 1st January 2012; Sinhaputra Finance - S C Imbuldeniya, A M G Weerakoon and Ms C M Balalle resigned from the board of Directors on 29th December 2011 while K H K Wijayadasa resigned as Chairman on 29th December 2011; Nihal Nissanka Ratnayake was appoointed Chairman on 29th December 2011 while Dr. Amal Randhir Karunaratna and Ekanayake Athukoralage Don Premalal Ekanayake were appointed Directors on 29th December 2011: e.Channelling PLC - A R Karunaratne resigned as Chief Executive Officer on 6th January 2012, and was appointed Executive Director on 6th January 2012.
Turnover for the 4-day week was encouraging at Rs 4.4 billion against Rs.3.7 billion last week. Both indices were down, the All Share Price Index losing 146.94 or 3% to end at 5782.47, while the Milanka was also lower by 130.17 points or 2.5% to close at 4915.92.