Profitability of dollar-earning export companies takes CSE to positive territory

By Hiran H.Senewiratne

The CSE bounced back yesterday to positive territory and sustained a Rs. 1 billion plus turnover in an apparent sign of improved investor sentiment stemming from positive gains in already released corporate quarterly results and an increase in profitability in dollar- earning export companies, stock market analysts said.

It is said that earnings from merchandise exports increased by 20 per cent year-on-year (Y-o-Y) in June 2022. As per statistics released by the Sri Lanka Customs, the earnings went up from US$ 980.2 million in May to US$ 1,208.2 million in June, giving some impetus to plantation and export oriented companies, market analysts said.

This growth in merchandise export earnings is a result of the increase in earnings from the export of apparel and textiles, rubber- and coconut-based products, food and beverages and seafood, the EDB mentioned. Apart from that, showing some political stability also stood the CSE in good stead and investor sentiment favourably improved at yesterday’s trading.

Amid those developments the stock market was positive from the beginning to the end and both indices moved upwards. The All- Share Price Index went up by 74.03 points and S and P SL20 rose by 16.23 points. Turnover stood at Rs 1.59 billion with one crossing. The crossing was reported in JKH, which crossed 509,000 shares to the tune of Rs 61.2 million, its shares traded at Rs 120.25.

In the retail market top seven companies that mainly contributed to the turnover were; Lanka IOC Rs 355 million (3.9 million shares traded), Expolanka Holdings Rs 174 million (839,000 shares traded), Dipped Products Rs 144 million (4.4 million shares traded), Hayleys Fabrics Rs 84.2 million (92.3 million shares traded), Browns Investments Rs 68.5 million (9.6 million shares traded), Richard Peiris Exports Rs 40.3 million (43000 shares traded) and Lankem Development Rs 38.8 million (4.1 million shares traded).During the day 65 million share volumes changed hands in 20000 transactions.

It is said high net worth and institutional investor participation was noted. Mixed interest was observed in Lanka IOC, Expolanka Holdings and Balangoda Plantations, while retail interest was noted in Kotagala Plantations, Browns Investments and Lankem Developments.

The Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Kotagala Plantations and Browns Investments). The Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index increased by 4.03 per cent. The share price of Lanka IOC increased by Rs. 3.90 (4.81 per cent) to close at Rs. 84.90. Lanka IOC and Expolanka Holdings were also included among the top turnover contributors.Yesterday, the Central Bank announced the US dollar buying rate as Rs 357.16 and selling rate as Rs. 368.41. Therefore, it is visible that the rupee is now becoming stable due to prudent policies adopted by the Central Bank, financial sources said.

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