Share market edges-up at mid-day in the wake of CBSL policy rate cuts

By Hiran H.Senewiratne

CSE shares edged up in mid- day trade yesterday as the Central Bank’s decision on cutting policy rates by 250 basis points lowered the rate at which liquidity is injected to markets to 14.0 percent from 16.50 percent, market analysts said.

“The overall sentiment is positive, because it was a higher than expected rate cut, which would lower its cost of debt, which would positively impact the profitability of companies, an analyst said.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier, according to a revised Colombo Consumer Price Index calculated by the state statistics office. The decline in inflation and improvement in foreign reserves, along with the stabilization of the rupee against the US dollar, created positive sentiment in the CSE, market sources explained.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 136.4 points and S and P SL20 rose by 56 points. Turnover stood at Rs 1.34 billion with a single crossing. The crossing was reported in Melstacorp, which crossed 1.56 million shares to the tune of Rs 83.9 million; its shares traded at Rs 54.

In the retail market top seven companies that mainly contributed to the turnover were, JKH Rs 542 million (3.9 million shares traded), Lanka IOC Rs 58.4 million (306,000 shares traded), Expolanka Holdings Rs 47.5 million (345,000 shares traded), Access Engineer Rs 47.1 million (3.2 million shares traded), Hayleys Rs 38.1 million (558,000 shares traded), Browns Investments Rs 35.2 million (7.1 million shares traded) and Capital Alliance Rs 32.1 million (one million shares traded). During the day 46.7 million share volumes changed hands in 13000 transactions.

It is said that high net worth and institutional investor participation was noted in JKH. Mixed interest was observed in Lanka IOC, Melstacorp and Expolanka Holdings, while retail interest was noted in SMB Leasing, voting and non-voting, LOLC Finance and Browns Investments.

The Food, Beverage & Tobacco sector was the top contributor to the market turnover (due to Browns Investments and Melstacorp), while the sector index edged up by 0.06%. The share price of Browns Investments recorded a loss of 10 cents to Rs. 4.80. The share price of Melstacorp closed flat at Rs. 53.

The Capital Goods sector was the second highest contributor to the market turnover (due to JKH), while the sector index increased by 0.24%. The share price of John Keells Holdings increased by 25 cents to Rs. 136.

Lanka IOC and LOLC Finance were also included among the top turnover contributors. The share price of Lanka IOC gained Rs. 3.25 to Rs. 128.75. The share price of LOLC Finance closed flat at Rs. 4.70.Yesterday, the Central Bank’s US dollar buying rate was Rs 283.87 and the selling rate Rs 297.23. The inflation rate had come down to 33.60 percent.