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Market turnover increases as index falls and BCEL heads ex dividend
The market opened strongly yesterday but the index slid and lost ground in every one of the last four sessions. Wednesday volume activity was up +155 percent - a complete reversal to Tuesday's close and a 35 percent gain on Monday. But a small fall in the share prices was nothing in comparison to the index's fall to its lowest point last visited on October 26 to 896.20 points (-10.36 percent YTD).
Yesterday recorded the biggest share volumes traded since June 27. 330,164 shares were traded with a turnover of US$282,966, the biggest since July 4.
The rationale of current trading is hard to fathom, because nothing supports Wednesday's 2.16 percent index fall, after applying fundamentals or technical analysis. Nor was the dip in share price understood or warranted, for BCEL turned over most volumes for US$248,599 now ex-dividend – a share price of -1.36 percent.
Similarly EDL-Gen, which was down 1.19 percent in the day's loss had no foundation either, with a turnover of US$34,367.
EDL-Gen and BCEL lost 50 and 100 kip respectively yesterday. There was no absence of shrewd buyers who quickly snapped up the bargain stocks on offer though.
BCEL went ex-dividend yesterday, probably the reason supporting some of the recent big volume trades.
On Tuesday the markets were going “W “shaped, but that quickly reversed to an “L” shape. What informed investors need to do is be patient - they just need to wait it out. All the attention this week has been directed towards BCEL banking stock volumes.
EDL-Gen's share prices have been virtually landlocked since August despite yesterday's fall. The fall had no substance to it other than investors wishing to close the year out in a cash position. The fall yesterday from an experienced investor's point of view would rate yesterday's small loss as insignificant.
Yesterday the first session saw above average share volumes of 75,400 shares traded, but things tapered off from there until the 5th and 6th sessions when total volumes returned a positive trade of 330,164 shares.
Things turned by the 4th session on extremely low volume trade of just 3000 shares, causing the index to fall 8.79 points when EDL-Gen went down 50 kip to 4,200 kip magnifying the index's overall loss .
In the 5th session the volume returned as 150,000 stocks emerged. This time the index dropped another 3 points to 904.99 as BCEL lost 100 kip moving back to 7,500 kip.
In the last session EDL-Gen fell 50 kip to 4,150, its lowest point since November 1.
Any major activity next week would be a surprise. Traders that make buy or sell trades next week on Monday or Tuesday will have to wait until January 3 for the exchange to open and for settlement due to the Christmas/New Year break.
The LSX posted a notice on its website that BCEL were about to ex-dividend so on the declared date owners can expect to pick up around 8 percent or more on the directors' determined share price amount. EDL-Gen's second half year dividend will most likely be paid on December 30.
LSX advises 2011 Ex-Dividend date of BCEL shares: Ex-dividend date is the day, which is usually one business day before the “record date” (The date of confirming beneficial shareholders on the shareholder register book) [T-1 day Prior to record date] on 27 December 2011. When investors buy BCEL stocks on its ex-dividend date or after (i.e., Investor who acquires BCEL shares after the market close on Friday 23 December 2011 have the right to receive a dividend), they do not have any rights to receive dividends if they sell the stock on or after the ex-dividend date.
vientiane times
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