Banking sector quarterly results buoy share market

By Hiram Senewiratne

CSE trading was extremely bullish and positive yesterday especially amid expectations that banking sector quarterly results would be exceptionally good. This has resulted in the hope that overall the market is going to perform well, top stock market analysts said.

“This year’s quarterly results are expected to be exceptionally good and two banks, namely Pan Asia Bank and Union Bank, have performed reasonably well, raising expectations that banking sector quarterly results would be exceptionally good, Head of Sales -Softlogic Holdings, Eardley Kern told The Island Financial Review.

Kern said that banks should perform well despite deposits being less in number. On top of that most of the banks made their earnings by investing in international sovereign bonds in the external market and in the Treasury Bill/Bond business, Kern said.

Amid those developments the CSE edged- down yesterday in mid- day trade on profit-taking in the banking index, the largest sector in the stock market. But during the latter part of the session the market picked up and ended in green territory, market analysts said.

The main All- Share Price Index rose 64.2 points and the most liquid index S&P SL20 was up by 34.8 points. Turnover stood at Rs 2.9 billion with two crossings. Those crossings were reported in Richard Pieris, which crossed 7.48 million shares to the tune of Rs 186 million; its shares traded at Rs 25 and Hemas 250,000 shares crossed for Rs 20.8 million and its shares sold at Rs 83.20.

In the retail market top seven companies that mainly contributed to the turnover were, JKH Rs 428 million (2.1 million shares traded), Commercial Bank Rs 179.6 million (1.7 million shares traded), NDB Rs 147 million (1.7 million shares traded), CIC Holdings Rs 124 million (2.1 million shares traded), Sampath Bank Rs 122 million (1.5 million shares traded), Lanka IOC Rs 89.3 million (723,000 shares traded) and Pan Asia Bank Rs 83.7 million (4.2 million shares traded). During the day 78.9 million share volumes changed hands in 24000 transactions.

It is said the bourse moved on an upward trajectory displaying a volatile trend as it closed the day on a positive note. Selected banking sector shares, namely Commercial Bank, Sampath Bank and Seylan Bank, alongside blue-chip companies backed the index exceptionally well to continue its positive momentum in the green zone.

Treasury shares witnessed panic selling due to speculation of a possible introduction of a withholding tax or a super gains tax on primary dealer companies.

Yesterday, the Central Bank’s US $ buying rate was Rs 315.11 and selling rate Rs 328.60.