Bourse moves from despair to hope

[GMNet]

By Elton P Ebert
After a prolonged spell of desperation and despair, a welcome change on Wednesday and Thursday brought fresh hope to many investors, although a few Fund Managers and brokers would have liked the market to shrink further with the earnings multiple falling below 10 times, to bait fresh foreign funds.
The ASI was on top gear on Thursday when it jumped 255 points due to widespread activity not seen this year. It continued the next day at a steady pace, with a massive turnover of Rs. 2 billion, but slipped back due to some players resorting to the safety valve of quick profit taking.

Those who risked their capital when the ASI was very much in discomfort around the 5000 mark were afforded the opportunity of booking ample profit just before the extended weekend. Rights issues were announced by Pegasus, Hayleys MGT and Softlogic Capital, and a few more are to follow. AgStar Fertilizers Voting & Non-voting shares commenced trading on Thursday. Voting shares ended the day at Rs 17.90, but shrank to Rs.17.40 the next day.

The company made a private placement of 125 million shares of Rs.8 each collecting a billion rupees last July. Foreign interest was emphatic in the very lucrative Commercial Bank where over 11 million shares were transacted on Tuesday providing a boost to the days' turnover of Rs. 2.4 billion. A further 10.7 million shares were dealt on Friday. Besides the widespread activity by the retail segment, institutions were also active in stocks like JKH, SLT and the high priced but very profitable Ceylon Tobacco. Over a million shares in the highly diversified Aitken Spence were transacted on Thursday. Free Lanka Capital Holdings which sank to its lowest level of Rs.1.70 this week was unusually active on Wednesday when over 6 million shares were transacted.

The usual group of Panasian Power, Renuka Agri Foods, Blue Diamonds and Environmental Resources remained in the same vein this week too. Sampath in which a dividend and a share scrip is accruing was up at Rs.180 but ended the week at Rs.178.10. Swarnamahal Financial Services was at Rs.177 while Acme Printing & Packaging which was under the price band until Thursday moved up on Friday to Rs.26.50. Regnis Lanka dipped to Rs.312, as did E B Creasy to Rs.1015. A price band was removed from Acme Printing & Packaging on 17th February.

Changes in directorates: Onally Holdings PLC - P.A.I. Sirinimal Perera was appointed independent director and Chairman on 31st January; Mercantile Investments PLC - Viraj Perera and Sanjaya Bandara were appointed independent Non-Executive Directors on 9th February; Softlogic Capital Ltd - S.Deleted. Palihena was appointed an independent director on 1st February; Aviva NDB Insurance PLC - Anura Siriwardena was appointed Director on 8th February; People’s Merchant PLC - Sarath Rajapakse was appointed a Director on 14th February.

The turnover for the week was encouraging at Rs. 8.2 billion as against Rs. 3 billion for the earlier 3-day week. Both indices were lower, the All Share Index dropping 31.82 points or 0.2% to end at 5285.17 while the Milanka ended 79.71 or 0.5% lower at 4549.43