Fuel price reductions seen as a key to share market growth

By Hiran H.Senewiratne

The local stock market has the potential to grow further and business activities too could improve if fuel prices are reduced to a greater degree. Global crude oil prices are on a downward trend. They are now less than US $ 100 per barrel and they are continuing to go down in price. The CPC is currently grappling with heavy cumulative losses and consequently the government will not reduce fuel prices in a big way, market analysts said.

Amid those developments yesterday, both CSE indices moved upwards. The All -Share Price Index gained 65.18 points (0.73 per cent) to end at 8,975.75 and S and P SL20 gained 1,62 points (0.05 per cent ) to end the day at 2963.95. Turnover stood at Rs 3.1 billion with two crossings. Those crossings were reported in Lankem Development, which crossed two million shares to the tune of Rs 50.4 million, its shares traded at Rs 25.20 and JKH 310,000 shares crossed to the tune of Rs 39.7 million, its shares fetched Rs 128.

In the retail market top seven companies that mainly contributed to the turnover were, Lanka IOC Rs 483 million (2.6 million shares traded), Expolanka Holdings Rs 483 million (2.2 million shares traded), Lankem Development Rs 245 million (10.4 million shares traded), Browns Investment Rs 131 million (14.7 million shares traded), Renuka Agri Business Rs 122 million (14.7 million shares traded), Hayleys Fabrics Rs 118 million (2.9 million shares traded) and LOLC Holdings Rs 76 million (129,000 shares traded). During the day 14.5 million share volumes changed hands in 35000 share transactions.

It is said high net worth and institutional investor participation was noted in JKH, HNB and Sampath Bank. Mixed interest was observed in Lanka IOC, Expolanka Holdings and LOLC Holdings, while retail interest was noted in Browns Investments, Lankem Developments and Renuka Agri Foods.

The Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Lankem Developments and Browns Investments) while the sector index gained 1.17 per cent. The share price of Lankem Developments moved up by Rs. 4.20 (23.73 per cent) to close at Rs. 21.90. The share price of Browns Investments appreciated by 10 cents to close at Rs. 8.20.

The Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index increased by 1.12%. The share price of Lanka IOC increased by Rs. 2 (1.08%) to close at Rs. 188.

Expolanka Holdings and JKH were also included among the top turnover contributors. The share price of Expolanka Holdings gained 75 cents to close at Rs. 211.75. The share price of John Keells Holdings recorded a loss of 25 cents to close at Rs. 127.75.

Yesterday the Central Bank’s dollar buying rate was Rs 357.41 and the selling rate Rs 368.72. It is said that pressure on the exchange rate is easing with higher interest rates and a slowdown in credit with curb premiums also falling, Central Bank Governor Dr. Nandalal Weerasinghe told a monthly policy review meeting last Thursday.