CSE investor sentiment hit by Russia-Ukraine tensions; crude oil prices reach $ 100 per barrel

By Hiran H.Senewiratne

CSE investor sentiment was affected yesterday by the global tensions stemming from the Russia-Ukraine crisis. Consequently, global crude oil prices reached more than US $ 100 per barrel, which would heap an additional burden on the Sri Lanka economy, stock market analysts said.

The stock market was halted for 30 minutes yesterday by another circuit breaker due to the S&P SL20 index dropping over 5 per cent from the previous day’s close. This is the fourth time the market halted over the past four days.

The stocks had risen steadily for several years and are going through a correction, amid macro-worries. Power cuts, fuel shortages and forex crises have eroded investor confidence this week. The increase in global fuel prices would create further inflationary pressures on the economy, stock analysts said.

Yesterday the All- Share Price Index decreased by 560.7 points and S and P SL20 went down by 197.5 points. Turnover stood at Rs 3.7 billion with two crossings. Those crossings were reported in Guardian Capital Partners, which crossed 4.4 million shares to the tune of Rs 138 million and its shares traded at Rs 32.30 and Renuka Hotel PLC 800,000 shares crossed to the tune of Rs 70.4 million, its shares traded at Rs 88.

In the retail market top seven companies that mainly contributed to the turnover were, Expolanka Holdings, Rs 767 million (eight million shares traded), Browns Investments Rs 317 million (239,000 shares traded), LOLC Holdings Rs 205 million (239,000 shares traded), LOLC Finance Rs 169 million (8.9 million shares traded), Hayleys PLC Rs 157 million (1.5 million shares traded), Royal Ceramic Rs 150 million (2.7 million shares traded) and Access Engineering Rs 118 million (4.7 million shares traded) During the day 169 million share volumes changed hands in 43000 share transactions.

First Capital said the bourse headed to the red zone with a steep fall one more time during the week amid the escalation of uncertainties. CSE halted twice for 30 minutes while S&P SL20 index fell initially by 5.0 per cent and then by 7.5 percent following major panic selling by investors, resulting in the ASPI recording an intraday decline of nearly 800 points.

It is said that high net worth and institutional investor participation was noted in Hayleys, LOLC Holdings and Royal Ceramics. Mixed interest was observed in Expolanka Holdings, LOLC Holdings and Royal Ceramics, while retail interest was noted in Browns Investments, SMB Leasing and Industrial Asphalts.

Meanwhile, the US dollar rate was quoted at Rs 203.35, which was the CBSL’s controlled price. The actual market price would be Rs 250 or above and the US dollar would touch more than Rs 300 towards the end of the year, financial analysts said.