CSE turnover improves as investors absorb impact of new policies

By Hiran H. Senewiratne

The CSE slipped yesterday led by stocks that may likely be impacted by the 2023 budget presented this week, but turnover improved as markets and investors gradually absorb the impacts of the policies.

The stock market started on a positive note but could not maintain its momentum due to certain budget proposals. President Ranil Wickremesinghe in his capacity as the Finance Minister presented the 2023 budget in parliament which aimed at raising taxes by 63 per cent year-on-year, while showing some signals on fiscal consolidation.

The overall budget has nothing to do with the share market. But some of the policies will have an impact on some industries and companies. This resulted in both indices moving downwards. The All -Share Price Index went down by 71.7 points and S and P SL20 went down by 15.5 points.

Turnover stood at Rs 1.5 billion with a single crossing. The crossing took place in Kelsey Developments, which crossed 10.4 million shares to the tune of Rs 257 million and its shares traded at Rs 24.60.

In the retail market top seven companies that mainly contributed to the turnover were, SLT Rs 185 million (2.8 million shares traded), Expolanka Holdings (1.1 million shares traded), Hemas Holdings Rs 119 million (2.1 million shares traded), Dialog Rs 103 million (12.2 million shares traded), Lanka IOC Rs 96.5 million (537,000 shares traded), JKH Rs 68.5 million (484,000 shares traded) and HNB Rs 66.8 million (927,000 shares traded). During the day 61.9 million shares traded in 16000 transactions.

‘The budget has mentioned a fuel surcharge tax and that resulted in the fall of Lanka IOC shares. The overall budget is not positive for the retail sector and that dragged Richard Pieris down, observers said.

Richard Pieris fell 12.4 per cent to Rs. 22 and Lanka IOC eased 4.6 per cent to Rs 175.

Market heavyweight Expolanka closed 3.9 per cent weaker at Rs 1422.25.

The budget saw policies that will increase the cost of doing businesses across the board, but relieving the government of depending on excess money printing, analysts say.

The market saw a foreign outflow of Rs 154 million. But the market has seen a total net foreign inflow of Rs 17.7 billion so far for this year.

Analysts expect a bearish sentiment on the banking sector to continue until the government decides on local debt restructuring.

The market has been on a falling trend as investors awaited cues on policies from the 2023 budget.

Investors are also concerned over the impact of local debt restructuring on risky assets, analysts said, as the market is waiting for a debt restructuring decision between the government and its creditors ahead of an IMF loan approval.

Yesterday, the Central Bank- announced US dollar selling price was Rs 360.96 and the buying rate Rs 360.96.