By Hiran H.Senewiratne
The CSE fell within the first hour of trading after opening to a stronger market yesterday but during the latter part of the day it witnessed some recovery with the announcement of some progress made at the IMF staff level agreement talks, stock market analysts said.
It is said that the latest IMF talks with Sri Lanka have made significant progress towards developing a policy package to stabilize the country but the latter has to move forward on debt restructuring to finalize a bailout, market sources said.
“The staff team and the authorities made significant progress on defining a macroeconomic and structural policy package, IMF sources were quoted as saying.
The discussions will continue virtually with a view to reaching a staff-level agreement on the EFF arrangement in the near term. Because public debt is assessed as unsustainable, the IMF Executive Board would require adequate financing assurances from Sri Lanka’s creditors that debt sustainability will be restored, which would give some relief to the country, stock markets analysts said.
The analyst also pointed out that they are seeing a trend in investors moving to energy sector shares following the adoption of a price formula.
“In a high inflation market, energy sector shares become lucrative. This we have seen in other markets too and it will strengthen more when a price formula is imposed on the electricity sector too, market analysts added.
Amid those developments both indices moved downwards. The All-Share Price Index went down by 23.6 points and S and P SL20 declined by 11 points. Turnover stood at Rs 785 million with a single crossing. The crossing was reported in Nations Finance PLC, which crossed 85 million shares to the tune of Rs 51 million; its shares traded at 60 cents.
In the retail market top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 244 million (1.4 million shares traded), Lanka IOC Rs 182 million (2.5 million shares traded), Browns Investments Rs 31.1 million (four million shares traded), TJ Lanka Rs 29.2 million (763,000 shares traded), Renuka Holdings Rs 21.8 million (1.5 million shares traded), LOLC Holdings Rs 17.7 million (45000 shares traded) and Softlogic Holdings Rs 16.3 million (622,000 shares traded). During the day 115 million share volumes changed hands in 9500 transactions.
Yesterday the Central Bank announced the US dollar buying rate as Rs 355.76 and the selling rate as Rs. 367.12. With prudent fiscal and monetary policies the rupee is strengthening, financial sources said.
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