Sept 19, 2008 (LBO) – Sri Lankan shares Friday recovered some of their losses the previous day, although volumes were moderate and local investors were still wary of buying, brokers said.
The All Share Price Index went up 1.28 percent (28.35 points) to 2,250.32 while the more liquid Milanka rose 1.74 percent (43.18 points) to 2,527.22. Turnover was 185 million rupees.
“The market recovered after yesterday’s steep fall mainly because of the recovery in John Keells Holdings,” said Sujeeva Peiris of Bartleet Mallory Stock Brokers.
“A few other fundamentally good stocks also followed but volumes were not that great.”
JKH, the most actively traded stock, went up nearly five per cent (four rupees) to close at 85 rupees with 359,900 shares traded between 82 and 86.
Much of Thursday’s plunge was because of losses in market heavyweight JKH as foreign investors sold.
The conglomerate has been hit by a spate of bad news after it lost its lucrative bunkering subsidiary on a court order, losses from which it now says could be heavier than initially thought.
In the overall market, foreign investors were actually net buyers Thursday mostly because of continued buying into Associated Motorways by Dubai-based Al Futtaim, analysts said.
Most of Thursday’s trading in the other heavyweight stock, Dialog Telekom, was also local.
Any foreign selling might have been to foreign investors too, brokers said.
Most Asian markets fell in the turmoil caused by the collapse of top American financial institutions.
But markets across Asia rallied Friday on news the United States would throw banks a lifeline to deal with bad debts behind the global financial crisis.
Other heavily traded stocks on the Colombo bourse Friday were Dialog Telekom, which closed flat at 9.25 rupees with 885,900 shares changing hands, and Lanka IOC, which also ended flat at 26 rupees with 659,600 shares traded.
Peiris said there was consistent buying into LIOC despite reports of the government considering imposing a new tax regime on the petroleum retailer.
Peiris said it was largely retail selling that had brought the market down in recent weeks.
“There’s no buying support among local investors.”
Peiris said that conditions seem to be improving in the local market.
The military was making consistent gains in the campaign against the Tamil Tigers and the economy maintaining a steady growth rate.
Although inflation and interest rates were still stubbornly high, there were signs they could come down, he added.
“The news within the country is favourable for the market to go up.”