Stocks close sharply lower, most sectors witness declines

by Hiran H.Senewiratne 

Trading activities at the CSE was bearish yesterday as most of the investors had pursued profit taking from all time high share prices during the recent trading days.

“As US dollar rate moved up to Rs. 220 to 230 level, most of the export oriented companies’ share price appreciated considerably within those days. However, the Central Bank’s unofficial peg on the rupee rate to the dollar at a fixed rate of Rs 203 for commercial banks triggered concerns among investors”, stock market analysts said.

Local banks quoted rates of Rs197/203 to the US dollar on Tuesday, stronger from around 226/233 to the US dollar a day earlier, following an official request, financial sources said.

Sri Lanka has no interbank spot market to establish a rupee/dollar price and foreign exchange is matched within banks and in an over-the-counter market.

The rupee had fallen to around 238 to the US dollar Monday, in the OTC market, financial sources said despite attempts by a group of banks to stabilize it at around 230 to the US dollar.

Due to that, share prices especially in  export related companies witnessed a slight negative impact on those stock markets, analysts said.

Despite intermittent recovery the stock market closed sharply lower due to profit taking as well as concerns over currency instability amidst high turnover.

All Share Price Index was down by 263 points and S and P SL20 down by 79.4 points. Turnover stood at Rs 10.4 billion with a single crossing. The crossing was reported in HNB (Non Voting), which crossed 4.5 million shares to the tune of Rs 590 and its share price traded at Rs 130.

In the retail market top five companies that mainly contributed to the turnover were Expolanka Holdings Rs 3.67 billion (21.1 million shares traded), Browns Investments Rs 2.1 billion (227 million shares traded), LOLC Holdings Rs 619 million (1.1 million shares traded), Hayleys Rs 508 million (4.8 million shares traded) and Dipped Products Rs 339 million (5.7 million shares traded). During the day 489 million share volume changed hands in 61,510 transactions.

In the meantime, Acme Printing and Packaging Holdings’s second largest shareholder Richardson Holdings Limited sold their entire stake to E.B Creasy and company for a Rs 86 million consideration. Richardson Holdings held  19.4 percent stakes which sold eight million shares at a share price of Rs 12 to E.B Creasy company.  It is said that high net worth and institutional investor participation was noted in HNB nonvoting, ACME Printing and Packaging and Vallibel Power Erathna.

Mixed interest was observed in Expolanka Holdings, LOLC Holdings and Royal Ceramics, whilst retail interest was noted in Browns Investments, SMB Leasing – voting and nonvoting.