Big cap counter developments affect share market

By Hiran H.Senewiratne

Both CSE indices pointed downwards yesterday due to a dip in the profit before tax of Sri Lanka's largest conglomerate JKH by five percent and a drop in the per share value by Rs. 2 of Chevron Lubricants shares due to the payment of dividends to shareholders, stock market analysts said.

Although the All Share Price Index dropped by 56.62 points and S and P SL20 by 37.87 points, the day's turnover touched Rs. 1.08 billion with two crossings. Those crossings came from Chevron Lubricants, which crossed 1.2 million shares to the tune of Rs. 85.85 million, per share value Rs. 70 and Three Acre Farm PLC 240,000 shares that crossed to the tune of Rs. 23.2 million, per share value Rs. 96.50.

In the retail market, companies that mainly contributed to the day's turnover were, JKH Rs. 702 million (4.9 million shares traded), Chevron Lubricants Rs. 55.8 million (798,000 shares traded), NDB Rs. 46.8 million (558,000 shares traded) and Sampath Bank Rs. 32.2 million (143,000 shares traded). During the day's trading 16.3 million share volume changed hands in 3154 transactions.      

The political uncertainty and rupee depreciation against the dollar are also adding insult to injury for the CSE . The Sri Lankan rupee ended weaker on Wednesday as outflows from government securities and stocks due to political uncertainty raised dollar demand.

More than 70 percent to the day's turnover was contributed by JKH.  However, stocks fell for the third session running, hitting a one-week closing low and moving further away from their near two-month closing high hit last week, as the political crisis continued after the Speaker of parliament said on Monday he would not recognise President Maithripala Sirisena’s sacking of Ranil Wickremesinghe and the appointment of Mahinda Rajapaksa as the Prime Minister.

 The rupee ended at 174.80/175.10 per dollar on Wednesday, compared with the previous close of 174.45/60. The rupee has weakened 1 percent since the political crisis began on Oct. 26.

The rupee hit a record low of 175.65 per dollar yesterday. The rupee weakened 3.7 percent in October after a 4.7 percent drop in September against the dollar. It has dropped 13.8 percent so far this year.

Since the Prime Minister’s sudden sacking, Rs. 6.7 billion  has flowed out of the stock market, while the bond market saw an outflow of around  Rs. 11 billion between Oct. 25-31, Central Bank data showed.

So far this year, the country  has seen Rs. 16.2 billion  in outflows from stocks and  Rs. 100.8 billion from government securities, bourse and Central Bank data respectively showed.

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