CSE ops halt half an hour before closing time in the wake of growing economic uncertainties

By Hiran H. Senewiratne

CSE operations halted due to the S and P SL20 index slipping over 5 per cent yesterday as economic uncertainties grew in tandem with speculation that arose over the weekend about another fuel price hike and major price rises in essential consumer items, stock market analysts said.

Amid those developments, trading halted half an hour before closing time, which was around 12 noon. The reasons being that the market feels there is insufficient communication on the IMF program, besides global oil prices moving up. It is believed there could be a fresh series of fuel price hikes, thereby triggering commodity price rises that in turn could create a drop in investor sentiment. Further, certain issues and the opposition triggered by SLPP MPs in parliament to the passing of the 21 st Amendment to the Constitution, add insult to injury, analysts explained.

“There’s a bit of uncertainty as to the agreement on the 21st Amendment, the budget and the IMF discussions. All those things are a bit dicey, a top market analyst said. Sri Lanka’s inflation in April is already at 39.1 per cent and if it moves beyond 50 percent the country will be facing hyperinflation, which is also a major worry.

The main All- Share Price Index fell by 251 points and the most liquid S&P SL20 fell by 132 points. Turnover generated was Rs 1.46 billion without any crossings. In the retail market top companies that mainly contributed to the turnover were; Expolanka Holdings Rs 496 million (2.5 million shares traded), Browns Investments Rs 323 million (36 million shares traded), Lanka IOC Rs 86.4 million (1.46 million shares traded), Hayleys PLC Rs 61 million (957,000 shares traded), LOLC Holdings Rs 48.6 million (90000 shares traded), LOLC Finance Rs 43 million (5.5 million shares traded) and Sampath Bank Rs 26.5 million (767000 shares traded).Top losers in the first hour were LOLC Holdings, Expolanka and Browns investments. During the day 73 million share volumes changed hands in 17000 transactions.

Yesterday, commercial banks quoted a US dollar at Rs 367 against telegraphic transfers, while the Central Bank interbank spot trade was at Rs 360.27 under a daily guidance rate. Commercial banks were quoting Rs 357/367 for telegraphic transfer dollars moving up from last week.

The Central Bank’s daily guidance margin on the previous day was Rs 1.00 plus or 4.00 minus the initial Rs 2.50 .The interbank guidance rate on Friday was Rs 360.3 per US dollar.


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