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Mar 17, 2011

Free fall ends at Colombo Stock Exchange

A fresh buying session at Colombo Stock Exchange pushed the indices up during early trading on Wednesday the 16 March 2011. Prices were stagnant thereafter amidst a dull sentiment. Low turnover and activity levels indicate both buyers and sellers are uncertain regarding the direction according to brokers. Stability at current price levels will gradually improve the turnover over the next few weeks brokers opined.

The All Share Price Index (ASPI) closed at 7,115.62 points, rose 1.23% by 86.60 points and the Milanka Price Index (MPI) closed at 6,643.74 points, topped 0.53% through 35.02 points during the day. Total turnover was Rs.904.96 million dropped 29.9% with a volume of 33.57 million shares changing hands (down 22.5%). Foreign purchases rose 56.27% to Rs.113 million and foreign sales rose 14.01% to Rs.90.65 million. Price to forward Earnings Ratio (PER) slightly rose 1.5% to 27 times.

A dud company, Lanka Cement (LCEM) a highly illiquid share which runs in Colombo course once in every three months due to market news on opening of its long stalled Kankesanthurai cement plant this time went up again and closed at Rs.26.50 (Rs.1.30 increase) due to a hype that said the company is in talks with a Chinese firm to construct a 25-storey office and shopping complex valued at about Rs.5.0 billion and is also looking for a local investor to re-build a defunct cement factory Kankesanthurai.

Manufacturing sector was the highest contributor to the market turnover mainly due to Lanka Walltile (LWL) and Ceylon Grain Elevators (GRAN). The sector index increased by 1.16%. Diversified

sector also contributed significantly to the market turnover due to Colombo Fort Land (CFLB) mainly, with the sector index gaining 0.48%.

The Lion Brewery (LION) made the highest contribution to the market turnover. The share price increased by Rs.8.90 (4.66%) and closed at Rs.200. Renewed interest of retail investors was witnessed in Lanka Walltile (LWL) and Colombo Fort Land (CFLB).

Two crossings were done of Lion Brewery (LION) 200,000 shares at Rs.202.00 and 100,000 shares of Colombo Dockyard (DOCK) 100,000 at Rs.250 per share.

The past few days have seen certain counters switching between negative and positive contributors to the indices, which indicate the short term focus of retail investors.


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