Lanka IOC share price depreciation negatively impacts bourse

By Hiran H.Senewiratne

Net foreign inflow to the CSE has hit a 10-year high of Rs. 24.6 billion despite the country’s external debt default and shrinking economy, analysts said. But the CSE waxed negative yesterday due to a share price depreciation of Lanka IOC stocks, besides other factors.

Foreign inflow in December so far has been Rs. 7 billion. This has propelled the year-to-date figure to Rs. 24.6 billion, surpassing the previous best of Rs. 22.7 billion achieved in 2013. Sri Lanka’s highest ever net foreign inflow of a mammoth Rs. 38.6 billion was in 2012.

This year’s net foreign inflow is singularly due to parent SG Holdings of Japan buying into Sri Lanka’s most valuable listed entity Expolanka Holdings, its sources said. Parent SG Holdings of Japan has increased its stake in Sri Lanka’s most valuable listed entity Expolanka Holdings PLC to 81 per cent as of Friday from 79 per cent by end September.

Amid those developments, the CSE was negative throughout yesterday due to profit- takings. One of the main contributing factors to the market downturn was the price depreciation of Lanka IOC, due to the market speculation on price revisions. Further, turnover has improved and institutional and foreign participation is still at a high level, stock market analysts said.

The stock market plunged in mid-market trade due to profit- taking and the market was on a downward trend throughout the morning. “Towards the end of the month we saw some profit- taking and sell-offs, an analyst said.

The All- Share Price Index was down by 113 points, while S&P SL20 was down by 54.2 points. The market generated a revenue/turnover of Rs 2.5 billion with four crossings. Those crossings were reported in Expolanka Holdings, where 3.1 million shares crossed to the tune of Rs 652 million, its shares traded at Rs 2.10, CIC Holdings 1.3 million shares crossed to the tune of Rs 106.3 million, its shares traded at Rs 85, JKH 425,000 shares crossed for Rs 59.5 million, its shares fetched Rs 140 and Lanka IOC 200,000 shares crossed for Rs 44.6 million, its shares fetched Rs 223.

In the retail market top seven companies that mainly contributed to the turnover were, Lanka IOC Rs 543 million (2.4 million shares traded), Expolanka Holdings Rs 182 million (880,000 shares traded), Richard Pieris Rs 118 million (4.3 million shares traded), Browns Investments Rs 113 (15.6 million shares traded), First Capital Holdings Rs 89.6 million (2.9 million shares traded), Softlogic Capital Rs 85.2 million (13.5 million shares traded) and Softlogic Life Insurance Rs 67.1 million (1.1 million shares traded). During the day 74.9 million shares changed hands in 17000 transactions.

Yesterday, the Central Bank announced the US dollar exchange rate as Rs 371.77.