CSE plunges amid rupee devaluation controversies

By Hiran H. Senewiratne

The CSE plunged further yesterday amid mixed sentiments over the devaluation of the rupee, coupled with weak macro- environmental conditions. Further, the Central Bank Governor Nivard Cabraal updated the CEOs of banks on the latest initiatives in terms of allowing flexibility in the exchange rate and that did not support the market in a positive manner, stock market analysts said.

Analysts said that though the recent devaluation was technically favourable to dollar earning companies some of the big counters declined the arrangement, dragging the market down. It was opined that the devaluation impact on imports and the overall uncertainty dampened investor sentiment.

Amid those developments both indices showed a downward trend with a weak turnover level or below average level of Rs 3.5 billion being registered. All Share Price Index went down by 359 points and S and P SL20 declined by 152 points. Turnover stood at Rs 2.5 billion with a single crossing. That crossing was reported in Hemas Holdings, which crossed 500,000 shares to the tune of Rs 29.7 million and its shares traded at Rs 59.50.

In the retail market, top six companies that mainly contributed to the turnover were; Expolanka Holdings Rs 509 million (two million shares traded), Browns Investments Rs 295 million (29.6 million shares traded), LOLC Finance Rs 154 million (10.2 million shares traded), LOLC Holdings Rs 137 million (168,000 shares traded), JKH Rs 100 million (712,000 shares traded) and Royal Ceramic Rs 89.5 million (1.8 million shares traded). During the day 137 million share s changed hands in 33000 transactions.

It is said that high net worth and institutional investor participation was noted in Hemas Holdings, Melstacorp and Sunshine Holdings. Mixed interest was observed in Expolanka Holdings, LOLC Holdings and Royal Ceramics, while retail interest was noted in SMB Leasing non-voting, Browns Investments and Lanka Orix Finance.

Yesterday’s the US dollar rate was Rs 229.50, having jumped 25 per cent following the free float of the dollar. However, the Central Bank kept the dollar rate at the maximum level of Rs. 203 until this week.