CSE returns to green territory following five-day bearish run

By Hiran H.Senewiratne

CSE trading turned positive yesterday after experiencing a massive plunge over the previous five days. However, the market was able to record the highest intraday trading level of the All- Share Price Index yesterday. The market started on a positive note but later turned negative for a short time. Later heavy buying interest on blue chip counters dragged the market to green territory, stock market analysts said.

Due to the heavy market downfall in the last four to five days most of the valuable share prices came down. As a result, bargain hunters grabbed the opportunity and purchased such stocks, analysts said.

Since last week, the market has lost Rs. 843 billion in value as investor sentiment turned negative on macro factors, while some sections opined that the bourse needs new buyers for attractive valuations. But yesterday the market was able to recover despite internal and external environmental issues, stock brokers said.

Due to the massive plunge in recent days, the year- to- date ASPI negative return is nearing 13 per cent while the S&P SL20 topped 15%. However, foreigners have cashed in with net buying of nearly Rs. 300 million so far this week. Amid those developments both indices moved upwards. All -Share Price Index went up by 450 points and S and P SL20 rose by 166.9 points. Turnover stood above the average level of Rs 4.2 billion with three crossings. Those crossings were reported in Commercial Bank, which crossed 2.6 million shares to the tune of Rs 210 million and its shares traded at Rs 79, Access Engineering one million shares crossed to the tune of Rs 24.5 million and its shares traded at Rs 24.50 and Sampath Bank 400,000 shares crossed to the tune of Rs 21.2 million, its shares traded at Rs 53.

In the retail market top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 932 million (3.7 million shares traded), Browns Investments Rs 397 million (36.7 million shares traded), LOLC Finance Rs 256 million (13 million shares traded), Commercial Leasing and Finance Rs 231 million (5.5 million shares traded), LOLC Holdings Rs 199 million (227,000 shares traded), Royal Ceramic Rs 155 million (3.4 million shares traded) and Commercial Bank Rs 133 million (1.6 million shares traded). During the day 165 million share volumes changed hands in 41000 transactions.

With the rising fear of investors, the index dropped at the beginning, yet managed to trade in the green zone for a few minutes. After suffering from a continuous break-down, during the latter part of the session the market turned positive. Diversified Financials sector was the top contributor to the market turnover (due to LOLC Holdings and LOLC Finance), while the sector lost 7.84 per cent. The shares of LOLC Holdings moved down by Rs. 93.50 (10.14 per cent) to close at Rs. 828.75. The shares of LOLC Finance recorded a loss of Rs. 2.20 (10.84 per cent) to close at Rs. 18.10.

Yesterday, the US dollar was quoted at Rs 201.97, which was the controlled price of the Central Bank. The actual market rate/ floating rate would be at the Rs 250 level. Some financial analysts predict that the dollar would to go up to Rs 300 towards the end of the year.