Speculation on interest rate decline triggers buying interest in primary dealer shares

By Hiran H.Senewiratne

Buying interest was noted in primary dealer shares yesterday due to speculation on an interest rate decline. This trend prevailed among banking, plantations and hotel sector counters throughout the day, market analysts said.

Amid those developments both indices moved upwards after experiencing a steep decline. The main All- Share Price Index was up by47.2 points, while the most liquid S&P SL20 was down by 32.5 points.

The market generated a turnover of Rs 729 million with two crossings. Those crossings were reported in Singer -Sri Lanka, which crossed 1.6 million shares to the tune of Rs 57.8 million, its shares traded at Rs 35 and Wind Force 1.9 million shares crossed for Rs 31.3 million, its shares traded at Rs 16.50.

In the retail market top seven companies that mainly contributed to the turnover were; HNB Rs 121 million (1.01 million shares traded), Aiken Spence Hotel Rs 60.4 (one million shares traded), Lanka IOC Rs 60.1million (458,000 shares traded), Expolanka Holdings Rs 38.7 million (285,000 shares traded), Watawala Plantations Rs 30.3 million (379,000 shares traded) Elpitiya Plantations Rs 18.5 million (186,000 shares traded), and Dipped Products Rs 14.7 million (559,000 shares traded). During the day 31.5 million share volumes changed hands in 10000 transactions.

“There is selling pressures on the construction index as bans are to come off, expecting lower turnover on revenue, an analyst said. Sri Lanka has expressed its intention to present a plan by June to lift import restrictions, while the government has promised the EU that it will gradually relax the restrictions.

IMF Mission Chief Masahiro Nozaki said Sri Lankan authorities will develop a plan for the phased removal of import restrictions and exchange restrictions related to the balance of payments (BOP), and that is due by June 2023. In March, the IMF too revealed that Sri Lanka was expected to phase out the import and exchange restrictions currently in place.

Sri Lanka’s rupee opened at Rs 305.20/50 against the US dollar in the spot market yesterday, dealers said, while bonds yields were unchanged.

A bond maturing on 01.09.2027 opened at 26.40/60 per cent, unchanged from 26.40/60 per cent, at Monday’s close. The rupee closed at Rs 305.40/60 against the US dollar in the spot market on Monday.