CSE bounces back; manufacturing sector stocks proving attractive for investors

By Hiran H.Senewiratne

The CSE bounced back yesterday, following its biggest fall in two months by the market heavyweight Commercial Leasing and Finance (CLC) on the previous day, with a very healthy record- breaking turnover level.

The main reason for the stock market to become so attractive, is that many investors believe that it is more profitable to invest in stocks rather than invest in government securities and fixed deposits due to the low interest regime.

Further, net foreign outflows amounted to Rs 46.8 billion to date.

Another reason for the stock market to be profitable is because import restrictions by the Central Bank have created the demand for certain products, such as, locally manufactured tiles and ceramic products. Their prices have gone up. Dollar earning companies in the stock market have also performed exceptionally well during the last few months, market analysts said.

Amid those developments the market was positive and showed an upwards trend due to Ex-Pack Corrugated Cartons Ltd.’s shares heavily trading on the first day itself following its IPO. Its listing price was Rs 8.40 and at the end of the day its share price shot up to Rs 17.60, which was a 109 percent or Rs 9.20 gain. Both indices moved upwards. All Share Price Index up by 192 points and S and P SL20 went up by 32.8 points.

Turnover stood at Rs 5.7 billion with two crossings. Those two crossings were reported in JKH, which crossed 610,000 shares to the tune of Rs 89.6 million and its shares traded at Rs 147 and HNB 300,000 shares crossed for Rs 51 million, its shares traded at Rs 170.

In the retail market top six companies that mainly contributed to the turnover were; Ex-Pack Corrugated Cartons Ltd Rs 1.3 billion (75.8 million shares traded), LOLC Finance Rs 816 million (39.8 million shares traded), RIL Properties Rs 400 million (30 million shares traded), Shaw-Wallace Investments Rs 316 million (32.8 million shares traded), Browns Investments Rs 316 million (27.5 million shares traded). During the day 363 million share volumes changed hands in 56000 transactions.

During the day notable buying interest was noted in Shaw-Wallace Investments. Its share price appreciated by 25 percent or Rs 2. Its share price shot up to Rs 10.10 from Rs 8.10. Pan Asian Power share price also appreciated by 21 percent or Rs one. Its shares started trading at Rs 4.70 and at the end of the day they moved up to Rs 5.70.

It said high net worth and institutional investor participation was noted in Access Engineering, Vallibel One and JKH. Mixed interest was observed in R I L Property, Expolanka Holdings and LOLC Holdings, while retail interest was noted in Browns Investments, Lanka Orix Finance and Pan Asian Power.

Separately, Lion Brewery and Lotus Hydro Power announced their interim dividends of Rs. 3.68 and Rs. 1 per share respectively. Yesterday, the US dollar rate was quoted at Rs 202.38, which was the Central Bank’s controlled price to prevent escalation of the prices of essential items.