Policy uncertainties restrain investors

By Hiran H.Senewiratne 

CSE activities were positive briefly yesterday but turnover proved negative as investors were cautious and tended to think twice before investing in the stock market due to the government’s inconsistent policies, stock market analysts said.

However, JKH share prices started moving up because  India’s  Adani Ports and Special Economic Zone Limited selected  JKH as a local partner along with the Sri Lanka Ports Authority (SLPA) to develop the West Container Terminal of the Colombo Port.

Cabinet spokesman   Minister Keheliya Rambukwella told  a press briefing   that  Sri Lanka will join hands with a giant Indian conglomerate to launch a  Build, Operate and Transfer deal to develop the West Container Terminal of the Colombo Port.

Accordingly, JKH share prices began to move up and at the end of the day its shares increased in price by 0.2 percent or 25 cents. JKH shares started  trading at Rs. 150.50 and at the end of the day they moved up to Rs. 150.75.

Amid those developments, both indices moved downwards. The All Share Price Index went down by 94.75 points and S and P SL20 went down by 52.18 points. Turnover stood at Rs. 1.99 billion with four crossings. Those crossings were reported in Sampath Bank, which crossed 3.2 million shares to the tune of Rs. 492 million, its shares traded at Rs. 155, HNB 450,000 shares crossed for Rs. 58.5 million, its shares fetching Rs. 130, Lion Brewery 89800 shares crossed for Rs. 48.5 million; its shares traded at Rs. 540 and Royal Ceramic 165,000 shares crossed for Rs. 45.5 million; its shares traded at Rs. 276.

In the retail market, five companies that contributed to the turnover were, Expolanka Rs. 144.4 million (3.1 million shares traded), Sampath Bank Rs. 131.8 million (848,000 share traded), Browns Investments Rs. 119 million (21.2 million shares traded), Dipped Products Rs. 100.4 million (2.1 million shares traded) and LOLC Rs.  87.7  million (251,000 shares traded). During the day 68.7 million share volumes changed hands in 16422 transactions.

It is said that  with the corporate results season having now come to an end and in the absence of any significant market catalyst, one expects the market to trade range-bound in the immediate term. 

“Nonetheless, given our sanguine long term outlook for the bourse, supported by our expectation of a low interest rate environment, we advise investors to gradually start accumulating a well-diversified portfolio of stocks which are cash generative, have strong earnings and revenue growth attributes, and have the ability to outperform over a complete market cycle, stock market analysts said.

Vidullanka PLC yesterday completed the acquisition of a 51% equity stake in Orik Corporation Ltd., which holds the right and approvals to develop a 1 MW ground mounted solar power plant in Moneragala.The power purchasing agreement signed with the Ceylon Electricity Board (CEB) allows the company to sell the generated electricity at a tariff of Rs. 15.97 for a 20-year period.According to the share purchase agreement, Vidullanka will further acquire a 10 percent  stake in the company upon achieving the financial close for the project. It will continue to invest in the equity of Orik Corporation, which would ultimately increase the ownership of Vidullanka to 87 percent, while the 13 percent  equity stake will be held by the promoters.

Sri Lanka’s rupee quoted weaker at 196.20/197.00 levels to the US dollar in the one-week forwards market on Tuesday while bond yields were steady, dealers said. The rupee last closed in the spot market at 195.50/196.00 to the dollar on Monday. The rupee has fallen from 186.40 in December 2020 to 194.40 to the US dollar in January 2021.