VAT hike spreads gloom among investors; disposable income an issue

By Hiran H.Senewiratne

The stock market remained positive yesterday but reported low turnover and local and foreign investor participation. The recent VAT hike created a sense of gloom among investors, since it tends to narrow people’s disposable income.

Investors are also worried that if a new government is voted in and it moves out of the current strong economic reforms, it would end up in disaster for the country, market analysts said.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 30.12 points and S and P SL20 rose by 17.62 points. Turnover stood at Rs 335 million without any crossings.

In the retail market, top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 28.8 million (202,000 shares traded), CTC Rs 25 million (26000 shares traded), Associated Motor Finance Rs 23.8 million (1.3 million shares traded), HNB Rs 22.2 million (131,000 shares traded), Sampath Bank Rs 14.9 million (211,000 shares traded), NDB Rs 14.5 million (222,000 shares traded) and Royal Ceramic Rs 13.9 million (532,000 shares traded). During the day 14.9 million share volumes changed hands in 7000 transactions.

The rupee closed stronger at 322.20/40 to the US dollar on Monday from 323.90/324.00 on Friday, dealers said.

The banking sector counters were active in the market and mixed market reactions were witnessed in Expolanka, CTC and Associated Motor Finance.

Bond yields were broadly stable. A bond maturing on 01.06.2025 closed at 13.60/80 percent from 13.60/75 percent. A bond maturing on 01.02.2026, closed stable at 13.80/90 percent. A bond maturing on 15.01.2027 closed at 13.80/90 percent from 13.80/95 percent. A bond maturing on 01.07.2028 closed at 14.15/25 percent from 14.10/25 percent. A bond maturing on 15.03.2030 closed stable at 14.05/30 percent. A bond maturing on 01.07.2032 closed at 14.10/30 percent, from 14.05/30 percent.