Assurances of support by India on debt restructuring trigger positive trend in shares

By Hiran H.Senewiratne

CSE trading activities registered a positive trend yesterday following a Bloomberg report that India has formally notified that it would support Sri Lanka’s debt restructuring plan, clearing a major hurdle for the bankrupt nation to unlock a US $2.9 billion bailout from the International Monetary Fund, stock analysts said.

Debt restructuring talks with India and China are successful, President Ranil Wickremesinghe told parliament as the country tries to get an International Monetary Fund bailout. “I can tell this assembly that the talks are successful, Wickremesinghe told parliament yesterday.

Consequently, share prices appreciated in several selected stocks, mainly, Lanka IOC and Expolanka Holdings PLC. The Lanka IOC share price appreciated by Rs 15 or eight per cent. Its share price shot up to Rs 192.50 from Rs 177.50, while Expolanka Holdings’ share price appreciated by Rs 20.15 or 12 per cent. Its share price shot up to Rs 192.50 from Rs 172.

Meanwhile, selling pressure was noted in Softlogic Capital PLC and Softlogic Life Insurance. Accordingly, those share prices depreciated to a great extent. Amid those developments both indices moved upwards. The All- Share Price Index went up by 113.7 points and S and P SL20 rose by 70 points. Turnover stood at Rs 1.24 billion with a single crossing. The crossing was reported in HNB, which crossed 300,000 shares to the tune of Rs 23.4 million and its shares traded at Rs 78.

In the retail market seven companies that mainly contributed to the turnover were, Softlogic Capital PLC Rs 246 million (16.7 million shares traded), Softlogic Life Insurance Rs 168 million (1.65 million shares traded), Expolanka Holdings Rs 152 million (811,000 shares traded), Browns Investments Rs 119 million (70.7 million shares traded), LOLC Finance Rs 112 million (15.1 million shares traded), Lanka IOC Rs 93.6 million (494,000 shares traded) and ACL Cables Rs 32.3 million (484,000 shares traded). During the day 73 million share volumes changed hands in 17000 transactions.

Yesterday’s market turnover was the lowest for this year. However, the market is picking up because interest rates are likely to come down. Further, Treasury Bill rates are likely to come down in the future too, which possibility also positively impacted the stock market.

Yesterday, the Central Bank- announced US dollar buying rate was Rs 360.41 and the selling rate Rs 371.47.