Domestic debt restructuring worries bring down bourse

By Hiran H.Senewiratne

The CSE closed weaker yesterday to a more than one-week low in dull trade amid negative market sentiments due to investors waiting for directions from the 2023 budget scheduled for November 14, and worries over domestic debt restructuring, stock brokers said. A Ministry of Finance statement said domestic debt was included in the perimeter of an International Monetary Fund debt analysis. “This means liquidity conditions are going to tighten and might strain the profitability of local banks, stock market analysts said.

CSE shares fell in mid-day trade pulled down by index heavy shares and gloomy conditions in the external environment. The US Fed Reserve is also planning an interest hike, adding insult to the injury endured by the stock market, analysts said. However, investor sentiment improved latterly as retailers said that they expect interest rates to fall in line with inflation.

The main All Share Price Index (ASPI) fell 0.72 per cent or 52.9 points and the most liquid S&P SL20 fell by 6.9 points. Turnover stood at Rs 1.1 billion with two crossings. Those crossings were reported in Cargills, which crossed 914,000 shares to the tune of Rs 205 million, its shares traded at Rs 225 and Browns Investments 6.7 million shares crossed to the tune of Rs 40.1 million, its shares traded at Rs 6.

In the retail market top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 228 million (1.4 million shares traded), Aitken Spence Rs 86.9 million (648,000 shares traded), Lanka IOC Rs 81.5 million (456,000 shares traded), Browns Investments Rs 60 million (9.9 million shares traded), Dipped Products Rs 32.1 million (1.1 million shares traded), Royal Ceramic Rs 31.9 million (one million shares traded) and CIC Holdings Rs 31.2 million (362,000 shares traded). During the day, 50.1 million share volumes changed hands in 12000 transactions.

It is said high net worth and institutional investor participation was noted in Browns Investments and C.T. Holdings. Mixed interest was observed in Expolanka Holdings, Lanka IOC and JKH, while retail interest was noted in SMB Leasing, Tess Agro and LOLC General Insurance.The Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) while the sector index gained 0.45 per cent. The share price of Expolanka Holdings increased by 75 cents to close at Rs. 167.75.

The Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index increased by 0.22 per cent. The share price of Lanka IOC gained one rupee to close at Rs. 176.25.Yesterday the Central Bank- announced US dollar buying rate was Rs 360.76 and the selling rate Rs 371.56.