Positive sentiment stemming from local political developments boosts share market

By Hiran H.Senewiratne

The CSE commenced on a low note yesterday as its indices continued to pull back due to extended profit-taking in heavyweight, banking and manufacturing sectors. But in the last half an hour the market showed some recovery and buying interest increased due to positive sentiment in the local arena, stock market analysts commented.

When all global stock markets are going through a downturn due to the economic recession, the CSE showed some positive sentiment following President Ranil Wickremesinghe’s fruitful bilateral discussions with Japanese Foreign Minister Yoshimasa Hayashi and Singaporean Prime Minister Lee Hsien Loong yesterday, market analysts said.

Further, Power and Energy Minister Kanchana Wijesekera’s assurance on September 27 that measures have been taken for the CEB to maintain power generation without extending power cuts from Wednesday, despite the Norochcholai breakdown, gave some impetus to stock market investors.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 17.4 points and S and P SL20 rose by 25 points. Turnover stood at Rs 5.8 billion with four crossings. Those crossings were reported in Expolanka Holdings, which crossed ten million shares to the tune of Rs 2.3 billion and its shares traded at Rs 228, Commercial Bank five million shares crossed for RS 275 million and its shares traded at Rs 55, Central Finance 850,000 shares crossed to the tune of Rs 58 million and its shares traded at Rs 69 and Hela Apparel three million shares crossed for Rs 37.2 million, its shares traded at Rs 12.40.

In the retail market seven companies that mainly contributed to the turnover were, Lanka IOC Rs 676 million (2.3 million shares traded), ACL Cables Rs 538 million (4.7 million shares traded), Expolanka Holdings Rs 365 million (1.6 million shares traded), First Capital Holdings Rs 95.5 million (5.6 million shares traded), First Capital Treasuries Rs 73.8 million (3.3 million shares traded), Richard Pieris Rs 65 million (two million shares traded) and Lankem Development Rs 61 million (1.7 million shares traded). During the day 118 million share volumes changed hands in 29000 transactions.

It is said the market commenced the week on a negative note with profit- taking visible on selected stocks as investors cut their margin positions ahead of the month end.

Meanwhile, Retail, Capital Goods and Materials sectors majorly pulled down the index whereas Plantation and Hotel sector counters witnessed an upsurge during the day.

The Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings), while the sector index gained 1.24 per cent. The share price of Expolanka Holdings increased by Rs. 2.75 (1.24 per cent) to close at Rs. 223.75.

The Capital Goods sector was the second highest contributor to market turnover (due to JKH and ACL Cables), while the sector index decreased by 2.13 per cent. The share price of JKH moved down by Rs. 3 (2.10 per cent) to close at Rs. 139.75. The share price of ACL Cables recorded a loss of Rs. 1.75 (1.61 per cent) to close at Rs. 107.25.

The year-to-date net foreign inflow to the CSE crossed the Rs. 13 billion mark on the previous day, fuelled by continuous buying into Expolanka Holdings by its parent SG Holdings of Japan.

The CSE saw a net buying of Rs. 1.8 billion on the previous day, of which Expolanka Holdings accounted for Rs. 1.7 billion. Of the Year to Date figure, Rs. 12.5 billion had been in September so far. The net foreign buying at CSE is after four years of outflow.

Yesterday, the Central Bank- announced US dollar buying rate was Rs 359.18 and the selling rate Rs 369.93.