By Hiran H.Senewiratne
The CSE was marginally down in the first hour of trading yesterday but recovered slightly in the middle of the session. But during the latter part of the day it turned negative because some positive market sentiments were defused on account of policy rates not being hiked to expected levels, coupled with continuing political instability, stock market analysts said.
‘The CSE saw little stability in the market because policy rates were only hiked by 100bps, whereas the market expected it to be more. Because of major adjustments in auction yields and market yields it was limited, market analysts said.
The Central Bank Governor Dr Nandalal Weerasinghe said that it has raised the interest rate at which overnight money is printed for banks by 100 basis points to 15.5 per cent as the country is gripped by galloping inflation and depreciation. ‘This type of situation is not favourable to the equity market. Because, investors would go for investments in treasury bills and bonds, market analysts added.
Amid those developments both indices declined. The All- Share Price Index went down by 59.5 points and S and P SL20 declined by 15.7 points. Turnover stood at Rs 791 million with one crossing. The crossing was reported in JKH, which crossed 233,000 shares to the tune of Rs 28.7 million; its shares traded at Rs 123.
In the retail market top seven companies that mainly contributed to the turnover were; HNB Rs 142 million (1.8 million shares traded), Lanka IOC Rs 124 million (1.7 million shares traded), Expolanka Holdings Rs 109 million (685,000 shares traded), Browns Investments Rs 52.5 million (8.3 million shares traded), Richard Pieris Rs 45.5 million (3.2 million shares traded), JKH Rs 40.8 (334,000 shares traded) and LOLC Finance Rs 21.2 million (3.5 million shares traded). During the day 42.8 million share volumes changed hands in 11000 transactions.
Yesterday the Central Bank announced dollar buying rate was Rs 356.80 and selling rate Rs 368.06.The dollar rate has been stabilized to a greater extent through the prudent fiscal policies of the Central Bank, financial sources said.
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