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Mar 23, 2011

Mysterious financial rally in Colombo Stocks while Subasinghe ups Ceylinco Insurance Stake

Colombo Stock Indices gained on Tuesday the 22 March 2011 amidst exceptional gains made by a few financial and banking counters. The sudden rise in those stocks cannot be explained by fundamentals according to brokers.

The All Share Price Index (ASPI) closed at 7,220.26 points, rose 0.89% by 63.93 points and the Milanka Price Index (MPI) closed at 6,696.79 points, topped 0.93% by 62.01 points during the day. Total turnover was at Rs.3.612 billion (rose 36.28%) with a total volume of 42.71 million shares changing hands (topped 47.4%). Foreign purchases rose 147.37% to Rs.138.77 million and foreign sales rose 195.16% to Rs.1.04 billion. Price to forward Earnings Ratio (PER) remained stable at 25.6 times and there were 130 gainers and 62 losers for the day.

Banking, Finance and Insurance sector contributed significantly to the market turnover mainly due to Sri lanka’s No.1 insurance giant Ceylinco Insurance (CINS) and Central Finance (CFIN) with sector index increasing 3.04%.

Ceylinco Insurance (CINS) made the highest contribution to the market turnover with 11 crossings amounting to 2,193,100 shares at Rs.750 per share. The share price increased by Rs 82.60 (1.81%) and closed at Rs.740. Foreign holding of the company decreased by 1,144,300 shares.It was anticipated by market sources that Prabhash Subasingh owned Global Rubber Industries Ltd. and Global Sea Foods Ltd bought the stake.

Guardian Capital Partners (WAPO) recorded exceptional gains once again despite the absence of a solid reason. Central Finance (CFIN) and LB Finance (LFIN) also made rapid gains.

Investors reacted to some extent to yesterday’s dividend announcement of Namunukula Plantations (NAMU) and Kotagala Plantations (KOTA).


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