Debt restructuring delays seen as sowing confusion among stock market circles

By Hiran H.Senewiratne

CSE trading yesterday was unable to maintain the previous day’s trading momentum due to speculation that the delay in the internal debt restructuring plan had created some confusion among stock market investors, market analysts said.

It is said that the debt restructuring process was expected to be completed in September but speculation in some sections revealed that it would likely be completed by November. That has created some confusion among the investors, which negatively impacted the stock market, analysts said.

“Majority of the selling pressures was borne by the tile counters and tile holding companies, market sources said.

The main All- Share Price Index was down 42.25 points, while the most liquid index S&P SL20 declined by 2.7 points. Turnover stood at Rs 893 million with one crossing. The crossing took place in JKH, which crossed 3.2 million shares to the tune of Rs 453 million and its shares traded at Rs 140.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs72 million (520,000 shares traded), Watawala Plantations Rs 29.8 million (410,000 shares traded), Sunshine Holdings Rs 29.6 million (687,000 shares traded), Expolanka Holdings Rs 19.9 million (140,000 shares traded), Lanka IOC Rs 15.5 million (124,000 shares traded), Elpitiya Plantations Rs 15.8 million (158,000 shares traded) and Ceylon Cold Stores Rs 15.3 million (393,000 shares traded). During the day 22.8 million share volumes changed hands in 8000 transactions.

High net worth and institutional investor participation was noted in PGP Glass Ceylon, Lanka IOC and Windforce Limited. Mixed interest was observed in HNB, Expolanka Holdings and Ceylon Cold Stores, while retail interest was noted in Industrial Asphalts, Browns Investments and Access Engineering.

The Banking sector was the top contributor to the market turnover (due to Hatton National Bank), while the sector index gained 1.15 per cent. The share price of HNB closed flat at Rs 120.The Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index increased by 3.37 per cent. The share price of Lanka IOC increased by Rs 4 to Rs 134.

PGP Glass Ceylon, Expolanka Holdings and Ceylon Cold Stores were also included among the top turnover contributors. The share price of PGP Glass Ceylon moved up by 30 cents to Rs 20.10.The Central Bank terminated a cash margin requirement on import letters of credit imposed over the previous 12 months to limit imports, as liquidity injection triggered forex shortages and a currency collapse.In an order issued under the monetary law, the Central Bank imposed a 100 per cent cash deposit margin on 843 imports on May 19, 2022 and February 16, 2023 to discourage imports.

Sri Lanka plans to lift import controls on 100 items which were banned during forex shortages in the past two years, which was hurting small and medium industries, State Minister for Finance Shehan Semasinghe said.Sri Lanka had controlled imports of 3,000 items denoted by HS codes out of a total of 8,000 during the past two years. The controls were then brought down to 1,000 as they hurt small and medium industries which depended on inputs.

The rupee pegged at Rs 302.80/303.10 against the US dollar in the spot market yesterday, while bond yields were steady, dealers said. A bond maturing on 01.09.2027 was quoted at 26.80/90 per cent, steady from Wednesday’s close at 26.85/27.00 per cent.The rupee was at Rs 302.80/303.10 against the US dollar in the spot market yesterday from Rs 303.50/304.20 a day earlier.