Sri Lanka stocks close one percent lower

Sept 19, 2012 (LBO – Sri Lanka stocks extended losses closing 1.04 percent lower Wednesday, as investors took profits from steep recent gains, while a newly listed finance company stock hit a new high, brokers said.

Many other stocks however lost ground for the second day as investors took profits after recent steep gains.

Abans Electricals closed 9.00 rupees lower at 112.10, Asia Siyaka, a newly listed stock which is more liquid closed down 1.30 rupees at 7.70, Bogawantalawa Tea Estate closed at 12.60 down and 1.40 and Carsons Cumberbatch closed at 447.70 down 10.90.

Alliance Finance rose 43.20 to close at 795.0, Central Finance closed at 175.70 down 1.80 rupees, Ceylinco Insurance fell 20.40 to close at 775.10 rupees, JKH closed up 1.00 rupee at 218.00.

The Colombo All Share Index closed at 5,849.14 down 61.67 points and the S & P SL 20 Index closed 36 points lower at 3,141.64 down 1.14 percent.

Turnover was 1.2 billion rupees.

George Steuart Finance, which was listed under a process known as ‘introduction’ to comply with a regulatory requirement to make finance companies publicly traded has rocketed up in thin trading.

In the stock of an introduced company, conditions similar to cornering are naturally created.

The stock closed at 1,253.60 up 224.50 Wednesday after being listed with an indicative price of 20 rupees with just 98 shares being traded.

The stock is now trading at 737 times March 31 historical earnings and 83 times book value as at May 2012. It is also the 18th largest capitalized company in the market valued at 28.2 billion rupees.