CBSL decision to continue current monetary policy stance leads to profit-takings

By Hiran H.Senewiratne

Profit- takings were noted in the stock market yesterday due to the Central Bank announcement that its Monetary Board had decided to continue the current monetary policy stance, market analysts said. Policy interest rates are to be maintained at their current levels, while measures are to be introduced to accelerate the reduction of market lending rates.

However, hotel sector counters witnessed buying interest after Central Bank Governor Dr. Nandalal Weerasinghe announced that tourist arrivals would increase and that the sector’s revenue will go up to US $ 2.3 billion from US 1.1 billion last year, market analysts added.

Amid those developments both indices moved downwards. The All- Share Price Index went down by 122.5 points and S and P SL20 declined by 55.5 points. Turnover stood at Rs 2.4 billion with five crossings. Those crossings were; Asia Hotel and Properties, whose 1.3 million shares crossed to the tune of Rs 59.5 million; its shares traded at Rs 53.50, Lanka IOC 500,000 shares crossed for Rs 57 million; its shares traded at Rs 114, Chevron Lubricants 600,000 shares crossed for Rs 57 million; its shares traded at Rs 95, Commercial Bank 490,000 shares crossed for Rs 44.1 million; its shares sold at Rs 90 and Melstarcope 500,000 shares crossed to the tune of Rs 39.5 million; its shares fetched Rs 79.

In the retail market top seven companies that mainly contributed to the turnover were; Capital Alliance Rs 329 million (4 million shares traded), Distilleries Rs 169 million (6.3 million shares traded), Aitken Spence Rs 136 million (909,000 shares traded), First Capital Rs 99.7 million (1.7 million shares traded), Ceylon Grain Elevators Rs 74.2 million (480,000 shares traded), HNB 66.5 million (371,000 shares traded) and Ceylon Hotels Corporation Rs 56.2 million (2.3 million shares traded). During the 74.7 million share volumes changed hands in 23000 transactions.

It is said high net worth and institutional investor participation was noted in CIC Holdings, JKH and Distilleries. Mixed interest was observed in Capital Alliance, Lanka IOC and Commercial Bank, while retail interest was noted in Marawila Resorts, Browns Investments and Pan Asia Banking Corporation.

The Diversified Financials sector was the top contributor to the market turnover (due to Capital Alliance), while the sector index lost 1.26%. The share price of Capital Alliance decreased by Rs. 8 to Rs. 84.00.

The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Distilleries), while the sector index increased by 1.12 percent.Yesterday, the Central Bank’s US dollar buying rate was Rs 317.40 and selling rate Rs 329.81.