Sell off in capitalised stocks

The Colombo Stock Market declined on a sell-off in large capitalised stocks. The ASPI lost 48 points (-2.2%) to close at 2,107 and the MPI lost 76 points (-3.1%) to close at 2,343.

Total turnover for the day was Rs 248.2 million, driven by transactions in AMW (Rs 127.5 million). Maskeliya Plantations (MASK) announced that its ultimate parent, Richard Peiris & Co Company (RICH) was in discussions for a possible divestment of shares in its management company - RPC Management Services (Pvt) Ltd (RPCMS).

MASK had moved up in the past few days on speculation that the company was being divested and saw its share reach a day high of Rs 34.50 before a trading halt to disseminate the announcement.

Subsequently, the MASK declined to Rs. 28.25 by the end of the day. NAMU closed at Rs 37.00 and KGAL at Rs 48.50. A sale of the management company enables a buyer to continue charging management fees from the plantation companies while avoiding a mandatory offer to their minority shareholders.

Globally markets continue to tumble with the Dow Jones Industrial Average closing below the 10,000 mark, the lowest since 2004. In Europe, Iceland was the latest nation to contribute to the financial crisis.

It borrowed Euro 4 billion from Russia, nationalised its second biggest bank, Landsbanki Isklands, loaned Euro 500 million to Kaupthing Bank - the nations largest - and also pegged its currency (the Krona) to a trade weighted index of currencies.

The island nation has a population of around 320,000 people whose per capita GDP at US$40,227.00 is one of the highest in the world.

Source: First Guardian Equities