Pall of gloom settles on bourse in the wake of price hikes

By Hiran Senewiratne

CSE trading was sluggish throughout yesterday due to price increases in essential consumer items and a deterioration in foreign reserves to dangerously low levels. These gloomy conditions in the country have adversely affected investor sentiment, stock market analysts said.

With the price hike in gas and speculation on a possible fuel price rise, Laugfs Gas and Lanka IOC share prices increased in the stock market. Laugfs Gas voting price appreciated by 11 percent or Rs 2.80. Its shares started trading in the morning at Rs 26.10 and at the end of the day they shot up to Rs 28.90. Meanwhile, Lanka IOC shares increased by 13 percent or Rs 3. Its shares started at Rs 23.70 and at the end of the day they moved up to Rs 26.70.

Increased prices, especially in gas and other essential goods, and foreign reserves dangerously coming down to the US$ 2.5 billion level have put pressure on almost all sectors in the stock market.

Amid those developments, both indices were down. All Share Price Index was down by 18.4 points and S and P SL20 down by 35.3 points. Turnover stood at Rs 2.57 billion with three crossings. Those crossings were reported in HNB, which crossed 406,000 shares to the tune of Rs 60.6 million, its shares traded at Rs 149, NDB 645,000 shares crossed for Rs 49.6 million, its shares traded at Rs 77 and Royal Ceramic 516,000 shares crossed for Rs 24.5 million, its shares fetched Rs 47.50.

In the retail market, five companies that mainly contributed to the turnover were, Expolanka Holdings Rs 304 million (1.6 million shares traded), Lanka IOC Rs 239 million (8.9 million shares traded), Royal Ceramic Rs 160 million (3.3 million shares traded), Agstar PLC Rs 114 million (9.8 million shares traded) and Browns Investments Rs 100 million (9.3 million shares traded). During the day 115 million share volumes changed hands in 30000 share transactions.

Yesterday, the Sri Lanka rupee was quoted against the US dollar at Rs 200.50. This was a Central Bank controlled rate, allowing a rise up to Rs. 203. However, this amount is higher in the actual market.