Stock investors jittery over Mid-East violence-inspired oil price rise

By Hiran H. Senewiratne

CSE plunged further into negative territory yesterday amid low turnover as the market proved sensitive to external and internal issues. Amid the current Israel- Hamas crisis, stock market investors became worried that the global oil price has gone up to US $ 92 from US 84, stock market analysts said.

Amid those developments both indices moved downwards. The All- Share Price Index went down by 90.97 points and S and P SL20 declined by 24.01 points. Turnover stood at Rs 822 million with two crossings. Those crossings were reported in Ceylon Theatres, which crossed 363,000 shares to the tune of Rs 97.7 million; its shares traded at Rs 255 and L.B Finance 500,000 of shares crossed for Rs 30.5 million; its shares traded at Rs 61.

In the retail market, the top seven companies that mainly contributed to the turnover were; JKH Rs 64.3 million (338,000 shares traded), First Capital Treasuries Rs 63.7 million (1.5 million shares traded), Lanka IOC Rs 49.5 million (496,000 shares traded), Browns Investments Rs 38.7 million (7.7 million shares traded), First Capital Holdings Rs 36 million (696,000 shares traded), Lanka Hospitals Rs 25 million (209,000 shares traded) and NTB Rs 23.4 million (233,000 shares traded). During the day 38.1 million share volumes changed hands in 11000 transactions.

It is said high net worth and institutional investor participation was noted in JKH, Chevron Lubricants and Cargills. Mixed interest was observed in Lanka IOC, First Capital Treasuries and Expolanka Holdings, while retail interest was noted in Nation Lanka Finance and LOLC Finance.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) while the sector index lost 1.36%. The share price of JKH decreased by Rs. 3 to Rs. 190.

The Diversified Financials sector was the second highest contributor to the market turnover (due to First Capital Treasuries), while the sector index decreased by 1.67%. The share price of First Capital Treasuries moved down by 20 cents to Rs 41.

The rupee opened at Rs 324.00/50 to the US dollar on Wednesday, from Rs 324.10/40 on the previous day, while bond yields were up, dealers said.

A bond maturing on 01.08.2026 was quoted at 15.10/20 percent, up from 15.05/12 percent. A bond maturing on 01.07.2028 was quoted at 14.60/65 percent, up from 14.55/65 percent. Sri Lanka bond holders have proposed bonds whose coupons and value are linked to the “evolution of dollar GDP”.

The bonds hope to overcome two sticking points: GDP projections and exchange rate projections. Under the plan proposed by bondholders, interest rates on restructured bonds will fall to 3.5 percent with a 20 percent haircut, if projected GDP falls below 86.1 billion US dollars by 2028-2032.