Stock market bullish, anticipating political change

By Hiran H.Senewiratne

The CSE was somewhat bullish yesterday and there was bargain hunting on discounted stocks by many investors, anticipating political change. Foreign investors also exited the market on the previous day and yesterday creating opportunities for bargain hunting in stocks, market analysts said.

Local Treasury Bill rates remained unchanged having moved down 12 consecutive times. Amid those developments both indices moved upwards, ie, the All Share Price Index closed 43.44 points up at 5,378.73. The index gained steadily throughout the day, reaching an intra-day high of 5,382.03 in the final half hour of trading and the more liquid S&P SL20 Index closed 0.67 percent or 16.66 points up at 2,504.73.

The day's turnover stood at Rs. 254.8 million with one crossing/arranged transaction. It is said that 106 stocks gained and 27 fell. The crossing came from Ceylon Cold Stores (CCS), which crossed 82,000 shares to the tune of Rs. 46.7 million, per share value Rs. 570.

In the retail market companies that mainly contributed to the day's turnover were, Chevron Lubricants Rs. 33.3 million (551,200 shares traded), Aitken Spence Rs. 20.8 million (502000 shares traded), Access Engineering Rs. 18.5 million (1.3 million shares traded), Ceylinco Insurance (Non Voting) Rs. 16.2 million (20300 shares traded) and Expolanka Rs. 15,8 million (3.1 million shares traded). During the day 13.4 million share volume changed hands in 4198 transactions.

Sri Lanka's stocks closed 0.84 percent higher on Wednesday with buying interest on Melstacorp, Carson Cumberbatch and Dialog Axiata, provisional data showed.

Melstacorp closed Rs. 2 up at Rs. 40 a share, contributing most to the ASPI gain.

Carson Cumberbatch closed Rs. 10 up at Rs. 165 a share and Dialog closed 20 cents down at Rs. 9.30 a share, also pushing up the benchmark index.

There was a negotiated trade in CCS at Rs. 570 a share, but it went on to close trading flat at Rs. 599 a share. CCS recently said that the soft drink market, which faced reduced demand for the most of 2018/19 financial year, started seeing a pick up in the final quarter as the government reduced the tax rate on sugary drinks.

Further, shares ended firmer for the third straight session on the previous day to hit a near one-month closing high on local buying, even as foreign investors continued to pull out funds from equities, while the rupee ended slightly stronger.

The benchmark stock index ended 0.23 percent firmer on at 5,335.29, its highest close since May 9. It fell 0.24 percent last week and declined 11.9 percent this year so far. The index had hit its lowest level since May 17 last Thursday.

The rupee ended at 176.30/60 per dollar, compared with Friday’s close of 176.40/50. Analysts expect the rupee to weaken further as money flows out of stocks and government securities.

The rupee fell 0.03 percent last week but is up 3.57 percent for the year. Exporters had converted dollars as investor confidence stabilised after a US $1 billion sovereign bond was repaid in mid-January.

The rupee dropped 16 percent in 2018 and was one of the worst-performing currencies in Asia.

Foreign investors sold a net Rs. 3.5 billion worth of government securities in the week that ended on June 4, extending the island nation’s net foreign outflow to Rs. 21.9 billion so far this year, Central Bank data showed.

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