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Big Guns Absent

Jan 22, 2011 2:27:33 PM - thesundayleader.lk
  • Bourse

The market, driven by retailers rushing to take advantage of the stock market boom in a falling interest rate scenario, reached new highs on Friday,’s trading, with the benchmark ASI gaining by 60.9 points (0.8%) over that of Thursday’s close to finish the week at 7,254 points, however the more sensitive MPI which captures the movement of blue chip stocks shrank by 7.78 points (0.1%), a sobering effect, and a probable reflection of the absence of big guns from the market.
Market turnover was Rs. 4.1 billion.
But with bank results for the quarter ended December 31, 2010 expected to be out by the middle of next month, and signs being that those results are going to be good, foreign interest in the bourse is expected to once more pick-up, a market source told The Sunday Leader.
Howbeit some 700,000 shares of John Keells Holding PLC was bought by foreigner at Rs. 293 a share on Thursday’s trading, while shares of stocks such as LAUGFS and Singer Finance evinced retailer interest.
Currently the bourse is mainly retailer driven, with new investors coming into the fray due to falling deposit rates, an activity that started 1½ years ago, he said.
Local institutions and high networth individuals are however in the sidelines, the source said.
Another source said that with new retail investors joining in the fray, he was not worried about the absence of foreign investors from the bourse. The market commanding high price earning ratios (PER) are believed to be a deterrent in attracting foreign investments into the bourse. However performances of institutions, in particular banks, being expected to be good in the immediately preceding quarter, that is expected to bring down the PER of such stocks to more acceptable levels, hence making such attractive for investments.