Expectation of policy interest rates decline spurs share market

By Hiran H.Senewiratne

CSE trading kicked off on a negative note but later turned positive yesterday, on account of investors becoming a bit optimistic over reports that Central Bank policy interest rates would come down today, market analysts said.

Market analysts said indices remained in the red with a moderate turnover as investors opted to stay on the sidelines awaiting clarity on the second IMF tranche amid speculation over oncoming budget proposals. Nevertheless, JKH witnessed increased activity, driven by foreign investors.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 69.91 points and S and P SL20 rose by 13.96 points. Turnover stood at Rs 874 million with one crossing. The crossing was reported in Melstacorp, which crossed 300,000 shares to the tune of Rs 24.6 million; its shares traded at Rs 82.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 168 million (888,000 shares traded), Capital Alliance Rs 149 million (2.1 million shares traded), First Capital Rs 32.3 million (698,000 shares traded), Softlogic Capital Rs 26 million (2.4 million shares traded), NDB Bank Rs 21 .7 million (336,000 shares traded), Hayleys Fabrics Rs 21.1 million (448,000 shares traded) and Dialog Axiata Rs 20.9 million (1.9 million shares traded). During the day 33.8 million share volumes changed hands in 11500 transactions.

It is said that high net worth and institutional investor participation was noted in JKH. Mixed interest was observed in Capital Alliance, Distilleries and Expolanka Holdings, while retail interest was noted in Browns Investments, Industrial Asphalts and LOLC Finance.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) while the sector index lost 0.37 percent. The share price of JKH increased by 50 cents to Rs. 191.

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance and First Capital Holdings) while the sector index decreased by 2.72%. The share price of Capital Alliance lost Rs. 5.40 to reach Rs. 70.60. The share price of First Capital Holdings declined by Rs. 3.50 to settle at Rs. 45.10.

Distilleries and Expolanka Holdings were also included among the top turnover contributors. The share price of Distilleries moved down by 50 cents to reach Rs. 26.90. The share price of Expolanka Holdings recorded a loss of Rs. 3.25 to reach Rs. 131.50.

Yesterday the Central Bank US dollar buying rate was Rs 318.10 and selling rate Rs 328.91.