Retailers to the fore in CSE’s bull run in the wake of positive responses on debt restructuring

By Hiran H.Senewiratne

CSE trading activities were extremely bullish and mainly driven by retailers yesterday, due to the market moving on green after India and China provided some feedback on restructuring debts, an analyst said.

The Indian government had informed the IMF on January 19 that it strongly supports Sri Lanka’s debt restructuring efforts, in the latter’s bid to secure a 2.9 billion dollar extended fund facility (EFF).

Meanwhile, Bangladesh also considered a debt moratorium for Sri Lanka, stock market analysts said.

Further, a much- awaited response was received from the Chinese government, which gave the Sri

Lankan government a positive response over the request for debt restructuring. The Exim Bank of China had indicated that they are willing to support Sri Lanka’s debt restructuring efforts, State Minister Shehan Semasinghe said.

Amid those development both indices moved upwards. The All- Share Price Index was up by 272 points and S and PSL20 rose by 108.2 points. Turnover stood at Rs 2.1 billion minus any crossings. In the retail market top seven companies that mainly contributed to the turnover were; Browns Investments Rs 201 million (28.9 million shares traded), First Capital Holdings Rs 178 million (4.5 million shares traded), Expolanka Holdings Rs 112 million (580,000 shares traded), First Capital Treasuries Rs 108 million (4.1 million shares traded), Capital Alliance Rs 105 million (3.2 million shares traded), Softlogic Capital Rs 86.4 million (6.2 million shares traded) and ACL Cables Rs 80.7 million (one million shares traded). During the day 116 million share volumes changed hands in 26000 transactions.

Banking counters have significantly moved up due to speculation that domestic debt restructuring may not be extended to commercial banks, the analyst said. During the first hour of trade the market generated a revenue of RS 1.2 billion, while the top gainers were LOLC, Sampath Bank and Commercial bank.

Sri Lanka bonds yields opened lower on Monday as China positively responded to support the request of restructuring debt by the government, dealers said while the rupee remained steady.

A bond maturing on 01.05.2024 closed at 30.75/31.00 per cent, down from 31.00/30 per cent at last close. A bond maturing on 15.05.2026 closed at 28.40/60 per cent on Monday, down from 29.90/30.10 per cent. A bond maturing on 15.09.2027 closed at 28.20/30 per cent, down from 29.00/10 per cent.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by another cent to Rs 362.16 against the US dollar.