Nov 03, 2011 (LBO) – Sri Lankan stocks slumped Thursday, a day after being pushed up almost three percent on news a regulator who had been cracking down on fraud had been removed, brokers said. The main All Share Price Index fell 0.85 percent (55.09 points) to 6,397.19, while the more liquid Milanka index fell 0.62 percent (35.57 points) to close at 5,707.98, according to stock exchange figures.
Turnover fell to 882 million rupees.
An initial public offer by People’s Leasing Company to raise 70 million US dollars was oversubscribed on the opening day and closed in the afternoon, a stock exchange filing said.
People’s Leasing Co., the island’s largest leasing company, offered 390 million shares at 18 rupees a share.
HVA Foods was the most actively traded stock, closing at 44.40 rupees, down 2.60 rupees, with 3.15 million shares changing hands.
Colombo Land & Development Company was also heavily traded, closing at 59.70 rupees, down 2.80 with 1.58 million shares done.
Hayleys closed at 380.30 rupees, down 7.50, with 37,700 shares traded.
John Keells Holdings closed flat at 195 rupees with 462,600 shares traded, including a crossing or off-market private deal of 358,400 shares at 197 rupees each.
There was also a crossing of Ceylon Hotels Corporation of 750,000 shares at 32 rupees each. It closed at 31.60 rupees, down 20 cents.
Infrastructure Developers, the top gainer, closed at 197.10 rupees, up 65.10 rupees, with 98,300 shares done.
The Bukit Darah, an index heavyweight, lost half its gains of the previous day, closing at 1,060 rupees, down 28.60 rupees with 2,400 shares traded.
Colombo Pharmacy, another illiquid share, closed at 1,273.70 rupees, down 26.40 with 400 shares traded.
Diesel & Motor Engineering closed at 1,310.20 rupees, down 19.40 rupees.
SC Securities said more foreign buying was needed for the market to recover from its slide.
“The market could continue to look bearish, with a possibility of the ASPI dropping further,” SC Securities said in its weekly review up to Wednesday.
“However, a sporadic upside in the market is a possibility albeit with low sustainability, which may lead to a more volatile situation in the market during the next five days.
“We believe, the growth in indices and healthy activity levels will be sustainable only if confidence and vitality is provided by way of foreign investments, governmental and private institutional buying,â€ the brokeage said.
The market gained sharply Wednesday after steady slide of several weeks with news that Malik Cader, director general of the securities and exchange commission, had been made an advisor of the finance ministry, a move that had been widely speculated upon.
Cader had angered powerful players in the market for cracking down on widespread micro cap fraud and insider dealing that is said to be rife on the Colombo bourse.