Statement on Treasury operations negatively affects bourse

By Hiran H.Senewiratne

CSE trading started on a negative note yesterday but during the latter part of the day it ended up with mixed reactions. The negative sentiment stemmed from the government Cabinet spokesperson’s statement to the effect that government Treasury operations are not at the expected level, stock market analysts said.

Sri Lanka’s shares edge up in mid-day trade on speculation of bank interest rates falling. But there is a slight expectation that interest rates will be falling from the first part of this year, which can be viewed as positive for the banks, an analyst said.

Amid those developments both indices indicated mixed reactions. The All- Share Price Index went up by 13.2 points and S and P SL20 declined by 4.5 points. Turnover stood at Rs 1.3 billion with one crossing. The crossing was reported in CIC Holdings, which crossed 482,000 shares to the tune of Rs 39 million and its shares traded at Rs 81.

In the retail market top seven companies that mainly contributed to the turnover were, Softlogic Capital Rs 353 million (21.6 million shares traded), Softlogic Life Insurance Rs 146 million (1.3 million shares traded), Capital Alliance Rs 88.5 million (2.9 million shares traded), Lanka IOC Rs 54.9 million (293,000 shares traded), First Capital Rs 50.9 million (1.5 million shares traded), LOLC Finance Rs 45.1 million (six million shares traded) and Expolanka Holdings Rs 35.2 million (206,000 shares traded). During the day 72 million share volumes changed hands in 19000 transactions.

During the day buying interests were noted in Softlogic Life, Softlogic Capital and several other blue chip counters

Foreign investors were net buyers in the equity market, purchasing stocks worth Rs 63.5 million, while domestic investors were net sellers, offloading Rs 1.79 billion worth of shares, the data showed.

Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment and disruptions caused by Russia’s invasion of Ukraine, according to the World Bank’s latest Global Economic Prospects report.

Given fragile economic conditions, any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade, observers said.

The global economy is projected to grow by 1.7 per cent in 2023 and 2.7 percent in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95 per cent for advanced economies and nearly 70 per cent for emerging market and developing economies. With those developments negative investor sentiment has been noted in every stock market, analysts said.

Yesterday, the Central Bank announced the US dollar buying rate as Rs 366.46 and the selling rate as Rs 371.36