CSE crashes within first hour as fears grow that SL is at a standstill

By Hiran H.Senewiratne

The CSE crashed within the first hour and turned negative yesterday over the fear that the country will come to a standstill this week as it runs out of fuel with no confirmation when the next fuel consignment will arrive in the country, stock market analysts said.

Minister of Power and Energy Kanchana Wijesekera told reporters that Sri Lanka’s oil suppliers are wary of supplying fuel to the country following its recent downgrades by rating agencies.

Traditional suppliers to Ceylon Petroleum Corporation could no longer bear the risk of supplying Sri Lanka due to unsettled arrears, the minister said. The country also has issues opening Letter of Credits (LC) and some of the new suppliers are asking for pre-payments. However, two high powered local delegations are to visit Russia to negotiate with the Russian authorities to obtain fuel at a lower cost, market analysts said.

The current fuel crisis and month- end profit takings moved the market to negative territory. The All- Share Price Index went down by 199.28 points and S and P SL20 declined by 92.94 points. Turnover stood at Rs 1.42 billion with three crossings. Those crossings were reported in Commercial Bank, where 2.5 million shares crossed to the tune of Rs 125.2 million, its shares traded at Rs 50, Vallibel Finance two million shares crossed to the tune of Rs 50 million and its shares traded at Rs 25 and JKH 300,000 shares crossed to the tune of Rs 36.75 million; its shares fetched Rs 122.50.

In the retail market, top seven companies that mainly contributed to the turnover were; Lanka IOC Rs 291.7 million (4.1 million shares traded), Expolanka Holdings Rs 271.8 million (1.51 million shares traded), Browns Investments Rs 162.8 million (20.4 million shares traded), Lanka Tiles Rs 79.9 million (1.78 million shares traded), Commercial Bank Rs 77.4 million (1.55 million shares traded), Royal Ceramic Rs 38.7 million (1.4 million shares traded) and LOLC Finance Rs 27.9 million (four million shares traded). During the day 56.2 million share volumes changed hands in 13564 transactions.

It is said that foreign banks are refusing to confirm Letters of Credit issued by Sri Lanka state banks and that oil suppliers too are now rejecting them due to the country’s crisis state.

Yesterday, the US dollar rate was Rs 359.34, Central Bank sources announced.


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