Local investors in wait-and-see mode in the wake of new Bill

By Hiran H.Senewiratne

It was reported that Asian shares became  active yesterday and made  gains while the dollar notched a four-month high against the yen, as investors awaited any indications from the US Federal Reserve on whether it would tighten its monetary policy.

However, the Colombo Stock Exchange was still dominated by foreign investors while local investors focused on the proposed Inland Revenue Act. Foreign investors went for blue chip stocks while local investors were adopting a await and see approach, stock market analysts said.

Amid those developments, the All Share Price Index went down by 10 points and S and P SL20 index climbed by five points, taking CSE turnover to Rs. 561 million with two crossings or arranged transactions.

Those crossings were; Nestle's 35,000 shares crossed for Rs. 66.6 million with per share value transacted for Rs. 1900 and MGT 2.2 million shares crossed for Rs. 37.6 million , per share value being Rs. 17.

In the retail market scenario, JKH Rs. 37.1 million (433,000 shares traded), MGT Rs. 39.1 million (2.3 million  shares transacted) and Richard Peiris  Rs. 38.1 million (2.9 million shares traded). Further, MGT shares dominated the market due to its crossing and being the second highest traded stock in the retail market.

During the day, 30.3 million share volumes changed hands in 5404 transactions.

When it comes to Asia, except for worries about North Korea, the situation in Asia is calm at the moment, and this is giving some relief to investors, international analysts said.

"The dollar has risen above the 114 level, and this is lifting Japanese shares."

San Francisco Federal Reserve President John Williams said Tuesday in Sydney that it was a reasonable view to expect one more rate hike this year, and his own view was to start adjusting the Central Bank's balance sheet in the next few months.

"Normalization of monetary policy in the coming months is almost priced in, and the Fed will start shrinking its balance sheet in September, and this does not necessarily mean a delay of rate hikes," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

Meanwhile JKSB reports -

ASPI: 6,748.15 (-10.09 pts; -0.15%); Val T/O: Rs. 561mn (US$3.65mn); Vol T/O: 30.3mn; Trades: 5,464

Advance/decline ratio: 79/111; Top gainer: PCH.N (+100.00%) ; Top loser: BLUE.X (-20.00%)


• The ASPI ended lower today amid subdued turnover levels. Activity centered around JKH, MGT, and NEST led market activity, including crossings seen in NEST and MGT. Trading in JKH & MGT accounted for 27% of total turnover.

• Diversified Holdings was the most actively traded sector (-0.38%)

• Investment Trusts was the best performing sector (+0.71%), supported by gains on CINV (+3.23%)

• Information Technology was the worst performing sector (-1.65%), dragged down by declines on ECL

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