Short Selling and Stock Lending to increase market liquidity

By Hiran H.Senewiratne

The Introduction of a regulated Short Selling and Stock Lending and borrowing system for CSE investors from yesterday will increase market liquidity and improve share transactions, stock market analysts said.

Consequently, both indices moved upwards. The All- Share Price Index went up by 10 points and S and P SL20 rose by 24.68 points. Turnover stood at Rs 789 million with two crossings. Those crossings were reported in JKH, which crossed 401,000 shares to the tune of Rs 77.2 million; its shares traded at Rs 192.50 and Melstacorp 157,000 shares crossed for Rs 37.7 million; its shares traded at Rs 82.50.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 312 million (1.6 million shares traded), Melstacorp Rs 34.4 million (417,000 shares traded), Lion Brewery Rs 32 million (35000 shares traded), Lanka IOC Rs 23 million (204,000 shares traded), Capital Alliance Rs 18.8 million (319,000 shares traded), Sampath Bank Rs 16.8 million (255,000 shares traded) and Ceylon Grain Elevators Rs 16.6 million (900,000 shares traded). During the day 15 million share volumes changed hands in 6000 transactions.

It’s said that shares of Melstacorp, HNB, LOLC, Commercial Bank, and CCS were trading up. Diversified Melstacorp and its subsidiary Distilleries Company of Sri Lanka had both announced dividends last week. Expolanka, National Development Bank, Asian Hotels and Properties, Laughs and Kelani Tyres were trading down.

Yesterday the rupee opened weaker at Rs 329.50/330.25 to the US dollar, from 329.00/75 on Friday, dealers said.

Bond yields were up. Bonds maturing on 01.06.2026 and 01.08.2026 were quoted up at 14.90/15.10 percent from 14.85/15.00 percent. A bond maturing on 15.09.2027 was quoted at 14.95/15.10 percent from 14.90/15.10 percent. A bond maturing on 01.07.2028 was quoted at 14.90/15.05 percent from 14.85/95 percent.