Banking sector stocks on a downside note amid CBSL’s directive to banks

By Hiran H.Senewiratne 

The banking sector counters in the Colombo Stock Exchange (CSE) witnessed slight pressure yesterday following the Central Bank’s directive to licensed commercial banks to refrain from entering into forward contracts of foreign exchange for a period of three months with immediate effect.

“In view of the need to avoid excess volatility in the foreign exchange market and the impact on banks’ risk management, the licensed commercial banks are hereby informed to refrain from entering into forward contracts of foreign exchange for a period of three months, with immediate effect,” the Central Bank said in the directive.

CSE was not able to witness the  upward trend following the depreciation of share price  in index heavy or biggest listed company in the CSE, JKH share value by Rs 8.25 or 4.6 percent. Its share price started trading at Rs 181.25 and at the end of it moved down to Rs 173. All Share Price Index was up by 5.78 points and S and P SL-20 up by 21.72 points.

Turnover stood at Rs 11.4 billion with four crossings. Those crossings reported in Commercial Bank 1.2 million shares crossed for Rs 116.2 million and its share price traded at Rs 100, Expolanka 1,4 million shares crossed for Rs 87.6 million and its share price traded at Rs 61, HNB 200,000 shares crossed for Rs 31.2 million and its share price traded at Rs 156 and JKH 141,800 shares crossed for Rs 24.8 million and its share price traded at Rs 175.

In the retail market top five companies that mainly contributed to the turnover were LOLC Rs 1.8 billion (4.6 million shares traded), Expolanka Rs 1.3 billion (21.2 million shares traded), Dipped Products Rs 802 million (1.1 million shares traded),Industrial Asphalt Rs 518 million (465 million shares traded) and Hayleys Rs 470 (586,000 shares traded). During the day 829 million share volume changed hands in 57,279 transactions.