CSE trading started with positive trend for the week but lost the momentum later in the day and closed lower. Index heavy weighted stocks fell sharply including Carsons Group. ASI lost  33.38 points to close at 5600.77 while MPI lost 35.24 points to close at 5861.87.  Total equity turnover stood at 1.74 billion rupees.

The Bukit Darah Plc lost 507.50 to close at Rs 6950.00 while Carsons Cumberbatch Plc fell 39.80 to close at Rs 723.60. Aitken Spence Plc was down by 44.20 to end the day at Rs 2544.30. Environmental Resources Investments Plc closed at  Rs 93.50, down 2.70.

There were 87 positive contributors & 95 negative contributors for the day. Central Finance Plc one of oldest Finance Company in Sri Lanka was up by 58.30 to close at Rs 642.10. Lanka Orix Leasing Company gained 13.90 to close at Rs 962.20. LB Finance closed at Rs 165.40, up 12.20. Elpitya Plantations Plc announced a sub division of shares and closed 3.80 higher at Rs 42.10.

Foreigners were net buyers with Rs 119.45 million purchases and Rs 104.59 in sales. There will be a consolidation or minor correction during this week.

Colombo bourse ended positive week today with All Share Index gaining 71.15 points to close at 5634.15 while Milanka index closed at 5897.11, up 34.11 points for the week. Total equity turnover for the week was 8.28 billion rupees compared to 11.87 billion reported previous week. Foreigners were net buyers with 1.25 billion rupee purchases and 1.05 billion sales. At the end of the week total market capitalization was Rs 1.85 trillion compared to Rs 1.82 trillion recorded for the last week.

Lanka Orix Leasing Company (LOLC) was the highest percentage gainer for the week and it was up by  Rs 299.70 to close at Rs 948.30. Leasing industry is about to grow rapidly with the recovery of the country’s economy after ending of the civil war that was prevailed almost for  thirty years.

Ceylon Leather Products was the highest percentage loser for the week by losing Rs 143.60 to close at Rs 124.20. Environmental Resources warrants were among the other heavily hit stocks  for the week.

PC House started trading in secondary market for the first time this week after their IPO early this month. Despite favorable quarterly results PC House fell below the issue price of Rs 11.00 on Friday. This is the first IPO which fell below its issue price in recent past.     

Today’s market was boosted by gains in DFCC and LOLC. DFCC closed at Rs 325.60, up 29.60 while LOLC cosed 71.30 higher at Rs 784.70. The benchmark Colombo All Share Index (ASI) cosed 18.88 points higher at 5582.87. Milanka index closed at 5876.38, up 15.73 points. Today’s total equity turnover amounted to 1.90 billion rupees.

Rarely traded J.L.Morison Sons and Jones (Ceylon) Plc was up by 135.20 to close at Rs 1561.70 while another illiquid stock E B Creasy and Co Plc gained seventy rupees to end the day at Rs 970.00. Ceylon Brewery Plc the country’s largest bear producer was up by twenty seven rupees to close at Rs 302.00 but on mere 100 shares. Ceylinco Insurance plc closed 17.60 higher at Rs 323.10.

Environmental Resources Investments Plc (GREG) lost 7.60 to close at Rs 95.80 while Ceylon Leather Products Plc closed at Rs 233.60, down 22.90. Aitken Spence Plc was down by 76.60 to close at Rs 2629.40. Dialog lost 10 cents to close at Rs 10.00.

There were 96 gainers & 96 losers for the day.   

From tomorrow investors will have another new stock to trade. PC House Ltd (PCH) the newest entrant to CSE will commence trading  on 26th August 2010. PC House shares will be listed on the main board of the Colombo Stock Exchange and will be classified under information technology sector. The assigned security code is PCH-N-0000.

PC House issued  57,233,334 shares at Rs 11/- per share in early this month to the general public & it was oversubscribed on the opening day. There is a possibility  of touching Rs 20/- when PC House starts trading tomorrow. PCH has already announced strong results for the period ended 31st July 2010.

Advantages And Disadvantages Of Internet Stock Trading

Many people are becoming more interested in Internet stock trading because there are so many websites promising to make them rich quick. However, while there are benefits to trading online, there are also disadvantages that you should be aware of before you begin investing or changing your current financial portfolio. The Stock market is a very complex machine with a language and actions that can easily overwhelm a person who does not have a knowledgeable support system in place when they begin.

If you are thinking about trading online through broker that does not provide advisory services, you will need a solid understanding of how the market works, the terminology, and the strategies for trading in order to make money. A stock broker must be registered to buy and sell shares in the stock market, so when you are trading online, you still are working through a broker to buy and sell shares.

Making decisions about buying and selling require a strategy and a thoughtful approach to the market. Besides terminology, you must also become effective at understanding and analyzing trends and be able to make decisions without having an emotional investment in the stocks you purchase. When you are comparing online brokerages, it will be important that they have a simulated trading platform for you to learn the intricacies of trading.

There are three types of broker services offered to individuals who want to expand their portfolio. The “Execution Dealing” brokers, which many online brokerages offer, responds to your instructions for trades. These brokers do not offer advice or information about trading and often are found in the discount brokerages. Brokers who offer “Advisory Dealing”, provide their clients with a complete education on stocks.

They will advise you about stocks and offer a number of services to help you earn the best return on your investments. “Discretionary Dealing” brokers collect information and, based on your goals and objectives, manage your portfolio. These brokers conduct trades on your behalf and usually will send a monthly or quarterly report on how your portfolio is doing.

Many successful traders find that using a combination of effective trading methods is extremely helpful. A broker that is available to meet with you and is knowledgeable about your portfolio and goals will be able to provide important information about the most effective trading strategies for your investment. When an individual has a broker that is focused on their needs and is able to do the analysis and research needed to identify stocks that will provide the highest return, it will not be necessary for you to spend time losing money while you learn the processes and strategies of successful trading.

Please note that some types of Internet stock trading mentioned here not applicable for online stock trading in Sri Lanka.

ASI gained sharply with the massive gains in Carsons Group shares & Aitken Spence. ASI crossed the 5500 index points to close at 5568.5 (up 146.75 points) while more liquid MPI closed at 5876.40, up 38.64 points. Turnover was at Rs 2.80 billion.

Carsons Cumberbatch Plc was up by 78.30 to close at Rs 861.50 while The Bukit Darah Plc which is also from Carsons group gained 742.80 to close at Rs 8171.30. Aitken Spence Plc (SPEN) closed at Rs 2462.30, up 223.80. SPEN already announced 1 to 15 share split. Lanka Orix Leasing Company Plc (LOLC) closed 53.60 points higher at Rs 589.70. Environmental Resources Investments Plc (GREG) ordinary voting shares closed 6.40 higher at 109.30. More than 1.2 million shares of GREG traded during the day.

There were 149 companies recorded gains while only 36 stocks lost their value. Nestle Lanka Plc lost forty rupees to close at Rs 700.00 while Commercial Bank of Ceylon Plc was closed at Rs 191.60, down 2.50.

Foreigners were net sellers with Rs 556.22 million purchases & Rs 824.72 million in sales. At the end of the day total market capitalization of the Colombo Stock Exchange was Rs 1,692,570,127,627.00. Investors were optimistic with the positive quarterly results of the listed companies.

CSE-Top-10-Gainers

Colombo ASI was up by 75.51 points or 1.48 percent to close at 5191.30 while MPI gained 36.81 points to close at 5781.40. Turnover was amounted to 1.02 billion rupees. The main reason for today’s sharp gains in indices was significant price increase in Carsons group shares. The Bukit Darah Plc was the highest gainer today closed at Rs 6146.50, up Rs 558.70. Carsons Cumberbatch Plc was up by 58.80 to close at Rs 647.30.

Aitken Spence Plc (SPEN) has announced 15 for 01 share split today to increase issued number of shares to 405,996,045 from current 27,066,403. There will be no change in the stated capital of the company after completion of the split. Distilleries Company of Sri Lanka who is a major share holder of SPEN closed at 143.00, up Rs 10.60. Lanka Orix Leasing Plc was up by 38.20 to close at Rs 443.30. The subsidiary of Swiss based multinational food company Nestle Lanka gained 39.10 to close at Rs 695.50.  

CSE-Top-10-Losers

Watapota Investments Plc was down by 66.00 to close at Rs 1250.00 while AVIVA NDB Insurance Plc lost 18.40 to close at Rs 247.10. Diesel & Motor Engineering Plc (DIMO) closed at 850.40, down 28.00 rupees.

ASI Movement During the day

After negative start with plunging over 100 points in early trading, CSE has started its remarkable recovery at around 11.00 am today. Colombo Stock Exchange has experienced massive down turn with the introduction of 10 percent up or down limits for all listed stocks last week. Market regulator Securities & Exchange Commission of Sri Lanka (SEC) has introduced this rule to prevent price manipulation of stocks.

At the time of witting this ASI gained 175 points (+3.60%) & MPI was up by 202 points or 3.64 percent. Turnover was amounted to 1.74 billion rupees.
John Keells Holdings was trading at Rs 257.00, up by 5.40 while Commercial Bank of Ceylon was trading around Rs 192.00.

Top Ten Gainers as at 1.00 PM -10-08-2010.

bloomberg Chart-ASI-Crash

Colombo Stock Exchange (CSE) has experienced dramatic decline today. Most investors are blaming this is due to recently introduced 10 percent daily trading price band rule. This was done to save investors from few stock price manipulators. There were incidents that bankrupt companies sky rocketing their prices. Ultimately small investors get burnt their fingers.

Although the speculative stocks were the hard hit among the losers it has spread to blue chips later. People who bought shares with borrowed money (Margin Traders) will have to face heavy losses. When margin providers ask to deposit short falls in investor’s margin accounts they have to do it urgently or face for force selling. If this happens (Force Selling) the market drop will get worse.

But we feel sharp quick drop is better than continued slow declines over couple of months. If market drop 100 to 200 points daily it will start to stabilize later part of this week.    
 
At the end of today’s trading ASI was down by 202.21 points (-3.99%) to close at 4862.86 while MPI lost 210.30 (-3.65%) to end the day at 5549.15. Turnover was 1.29 billion rupees. 

There were 178 losers & only six gainers for the day. Aitken Spence Plc lost 72 to close at Rs 1803.00 while The Nuwara Eliya Hotels Company was down by 60.00 to close at Rs 600.00. Nestle Lanka Plc was declined by 68.80 to close at Rs 621.20.

Lanka Ashok Leyland was the top gainer today to close at Rs 3600.00, up 200 rupees. HDFC was up by 2.50 to end the day at Rs 310.30.