Stock

Bourse nosedives despite fair valuations

21 Nov 2012 - {{hitsCtrl.values.hits}}

The indices of Colombo Stock Exchange (CSE) continued its downward flight for the fifth straight day amidst lack of buying interest on the board, both local and foreign, despite most of the shares now trading below t heir intrinsic values, according to stock market analysts and brokers.

The main All Share Price Index (ASI) yesterday breached the 5, 500 psychological level and closed 5434, losing 67 points, down by 1.27 percent. The more liquid Milanka Price Index (MPI) which sank below 5,000 point level however recovered to 5, 004, though losing 82 points, down by 1.61 percent. The newly introduced S&P SL20 Index fell 0.48 percent or 14 points to close at 2, 992. The turnover struggled amidst lack of large deals to Rs.272 million, well below the daily average turnover of Rs.910 million.

According to Lanka Securities, selling activity was evident by retail investors yesterday as people were preparing for the upcoming holiday season. However some analysts contradicted this statement saying that it’s too early for the market to lose steam for the December holiday season. “Markets extended its yesterday’s fall and have now broken below its crucial support level of 5,500. Technically the markets are looking weak and after the break of 5,500 it has opened way for further downside. On the downside the markets can test 5,300 levels and below this the next support zone comes around 5,200,” Bartleet Religare Securities said.

According to Softlogic Equity Research, the poor performance of I n d e x h e av y Dialog Axiata (-4.8%),Commercial Leas ing & Finance (-7.7%), John Keells Holdings (-0.9%) and Cargills (Ceylon) (-3.4%) predominantly weighed on the index negatively.

Quoting stock analysts and brokers, Reuters said that investors had been shifting to fixed deposits from equities after the Central Bank kept key policy rates at three-year high after the market closed on Friday.

“High interest rates and uncertainty on where the interest rates are heading are keeping the local investors away,” one broker was quoted as saying.

Foreign investors bought a net 75.5 million rupees worth of shares, extending the net foreign inflow this year to 34 billion rupees.

Stock

Bourse nosedives despite fair valuations

Most Popular Articles

SLCERT warns WhatsApp users against sharing OTPs to prevent hacking

EU Ambassador meets new BOI Chief to discuss economic ties

LATES'T NEWS

Sri Lanka ranks 95 along with Iran and South Sudan in Passport Index

Search of his residence: Sujeewa to file legal action

Woman hacked to death at private hospital in Trincomalee

Thai woman nabbed at BIA with ’ice’ worth Rs. 100 million

Bangladesh steps up repayments to Adani to avoid power supply cut