Lanka IOC stocks contributing to CSE’s bullish trend

By Hiran H.Senewiratne

CSE trading was bullish throughout yesterday, driven mainly by Lanka IOC stocks. This momentum and the macroeconomic conditions are seeing positivity coming into the market in the new month as we get closer towards a possible IMF program, a top market analyst said.

“Yesterday’s price revision is also working well with Lanka IOC being a driver in the market. It recorded a 11.6 per cent or Rs 10.40 gain. Its share price moved to Rs 99.70 from Rs 89.30 yesterday. There is some progress in some economic reforms; meanwhile, we are seeing good earnings in dollar companies, market analysts added.

The bourse extended its bull rally for the third straight session with strengthened investor sentiment over the country’s economic and political environment with possible indications on an all-party government in the making, while President Ranil Wickremesinghe revealed that he expects an IMF staff level agreement by end of August.

Further, with the global oil price decline Lanka- IOC and CPC, under their formula, could sell fuel below the Rs 370 level. This could enable absorption of CPC losses to a break-even level, stock market analysts said.

Amid those developments both indices moved upwards with the All- Share Price Index gaining 138.95 points (1.79 per cent) to end at 7907.52 and S and P SL20 going up by 67.73 points (2.77 per cent )to end the day at 2512.82. Turnover stood at Rs 2.38 billion with two crossings. Those crossings were reported in Melstacorp, which crossed 4.7 million shares to the tune of Rs 195 million, its shares traded at Rs 41 and JKH 275.000 shares crossed to the tune of Rs 32.9 million; its shares traded at Rs 119.75.

In the retail market, top seven companies that contributed to the turnover were; Lanka IOC Rs 583 million (six million shares traded), Expolanka Holdings Rs 185 million (one million shares traded), ACL Cables Rs 158 million (3.9 million shares traded), Browns Investments Rs 92.8 million (13 million shares traded), Hayleys Fabrics Rs 84.1 million (2.2 million shares traded), JKH Rs 83.6 million (699,000 shares traded) and Hayleys Rs 72 million (883,000 shares traded). During the day 93 million share volumes changed hands in 24000 transactions.

It is said that net foreign outflows are still at a low level and in the previous year they recorded Rs 370 million. But there is an increase of net inflows to a stable level. The stock market could cover up all losses to some extent.

The market has lost 36.5 per cent so far this year after being one of the world’s best stock markets with an 80 per cent return last year, when large volumes of money were printed.

Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.

Investors are also concerned over the steep fall of the rupee from Rs 203 to Rs 370 so far in 2022.Yesterday the Central Bank’s US dollar buying rate was Rs 357.30 and selling rate Rs 368.53.

Island.lk

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