Wait-and-see approach by most stock investors following interest rate decline

By Hiram H.Senewiratne

Institutional participation in CSE trading was not satisfactory yesterday due to uncertainties and delays in Sri Lanka obtaining the second tranche of the IMF loan. Consequently, most investors adopted a wait- and- see approach throughout the day, market analysts said.

Besides, with policy interest rates coming down, bond rates also came down. Accordingly, when policy rates were cut bond rates did not go up to the required level yesterday, thus not creating a conducive market place for stock market investors, analysts added.

Both indices moved downwards. All Share Price Index went down by 2.44 points and S and P SL20 declined by 4.16 points. Turnover stood at Rs 430 million without any crossings.

In the retail market top seven companies that mainly contributed to the turnover were, Capital Alliance Rs 32.7 million (571,000 shares traded), First Capital Holdings Rs 28.6 million (947,000 shares traded), Hayleys Rs 26.8 million (356,000 shares traded), Lanka IOC Rs 24.9 million (239,000 shares traded), Distelleries Rs 22.5 million (849,000 shares traded), JKH Rs 22 million (117,000 shares traded) and Sampath Bank Rs 21 million (311,000 shares traded). During the day 20 million share volumes changed hands in 7312 transactions.Yesterday, the rupee was flat at Rs 328/329 to the US dollar, steady from the previous day’s close of Rs 328.75.