Positive sentiments on external debt restructuring animates stock trading

By Hiran H.Senewiratne

Trading at the Colombo Stock Exchange (CSE) was positive yesterday following the IMF’s views on the Sri Lankan economy.

The global lender had reported that Sri Lanka’s economy has made impressive progress within a relatively short period, and on the strength of it, the much anticipated agreement signing would take place between the government and the creditors for external debt restructuring.

“The IMF has assessed that there has been “sufficiently strong progress on the debt restructuring” for a review of Sri Lanka’s program by its board on June 12, an official said.

“The authorities have been holding extensive discussions with external official creditors regarding an MOU with the official creditor committee and the final agreements with the Export Import Bank of China,” IMF Communication Director Julie Kozack told journalists in Washington DC.

“Discussions with external bondholders continue with the aim of reaching agreements in principle soon. Negotiations with the China Development bank are also at an advanced stage,” she said.

Amid those developments both indices moved upwards. All Share Price Index up by 22 points while S and P SL 20 up by 11.3 points. Turnover stood at Rs 1.2 billion with a single crossing. The crossing reported in Sampath Bank, which crossed 272,000 shares to the tune of Rs 21.7 million and it’s share price traded at Rs 79.90.

In the retail market top seven companies that mainly contributed to the turnover were HNB Rs 256 million (1.3 million shares traded), Sampath Bank Rs 150 million (1.8 million shares traded), People’s Leasing Rs 68.9 million (5.7 million shares traded), Access Engineering Rs 44.9 million (1.8 million shares traded), Hayley Rs 44 million (446,000 shares traded), DFCC Rs 41.9 million (537,000 shares traded) and Lanka IOC Rs 39.1 million (300,000 shares traded). During the day 38.1 million share volumes changed hands in 9400 transactions.

The banking and financial sector counters were dominating the market due to positive quarterly earnings.

Yesterday, the Central Bank announced it US dollar rate. The rupee improved slightly to open at Rs 302.55/65 to the US dollar in the first half-hour of trading, while bond yields were steady and stocks opened 0.15 percent higher, dealers said.

Sri Lanka rupee closed at Rs 302.80/303.10 to the greenback on the previous day.

In the secondary market, yields were slightly down, dealers said.A bond maturing on 15.12.2026 was quoted down at 9.95/10.00 percent from 9.95/10.05 percent.A bond maturing on 15.09.2027 was quoted at 10.45/65 percent down from 10.50/65 percent.A bond maturing on 01.07.2028 was quoted at 10.90/11.00 percent down from 10.95/11.05 percent.A bond maturing on 15.05.2030 closed at 11.70/80 percent down from 11.75/90 percent.