The market continued its placid run after the holidays except for some mild turbulence when a million shares in JKH were transacted on Tuesday and Thursday when the All Share Index shot up by 111 points subsequent to the lifting of the 10% price band.
There was much enthusiasm on Friday during the earlier part of the day but to the dismay of many it went in reverse gear with the ASI ending below the 5500 mark. However turnover was Rs. 622 million mainly due to a million shares in NDB Bank being transacted as well as dealings in over 10 million Amana Takaful, three million Overseas Realty and two million Panasian Power. Ceylon Tobacco which reached Rs. 720 on Thursday tapered down to Rs.650, while Nestle Lanka which was at Rs. 1,050 earlier closed lower at Rs.1,000 also on Friday. Among the recent IPOs, Access Engineering was down to Rs 23.90, while Textured Jersey gained to close at Rs. 7.20. Last week the minimum brokerage fee of Rs 10 and the CDS fee of Rs.5 were removed.
It appears that a feeble attempt is being made to increase activity in the share market by drawing back the retail segment which was estimated to be around 60% of market activity. It is believed that currently only about 10% of the retail players are interested in the share market for reasons well known. The prevailing dull and depressing market conditions are a cause for concern for many. Broking firms, margin providers and the state are the main victims. A director of a large brokerage said he is very disturbed and uncomfortable with the current conditions.
He says that the company recruited highly qualified staff with very attractive packages especially for research and expanded the office, but now it's very difficult to make ends meet. He agrees that rules to weed out crooks and unscrupulous speculators are good but these rules and regulations should have been thought of bearing in mind the development of the market and not the destruction of the market.
Punishment should have been given to the offenders, but not to all and sundry. He believes those with a good knowledge of the share market should have been involved in the framing of the rules. Some of the investors have told him that the brokers were ruthless when it came to forced selling, even if some small investors delayed payment by just a day or two, and now these investment advisors are going back to the very same players requesting them to come back to the market. It is now clear that foreign funds turn to Colombo once in a way when there are a few good bargains, but it is the retailers who were glued to the market earlier.
Taprobane Holdings Ltd got approval for the listing through an introduction on the Diri Savi Board 732,949,140 voting shares. Meanwhile there are a few more companies who will be getting a listing through an introduction. It is very creditable of the Commercial Bank to state that its billion rupee debenture did not attract a single applicant and they closed it on 18th April 2012, without resorting to any fake applications as is usually done.
Changes in directorates: The Finance Co. PLC - Ms Cherille Rosa was appointed an independent Non-Executive Director on 16th April 2012. Turnover for the week was much improved at Rs.1.8 billion when compared with Rs 400,000 for the three days last week. Both indices were marginally better, the ASI gaining 1% of 58.11 points to end at 5483.11while the Milanka was just 16 points or 0.1% higher to close at 4924.99. |
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