Two Recent Issuers Benefit From CSE’s Expanded Listing Criteria – The Island

By Hiran H. Senewiratne

The CSE produced its most compelling performance in recent months yesterday, with both indices gaining strongly on strong turnover reflecting improving investor sentiment. Of note, the market was extremely bullish and driven primarily by blue-chip counters, particularly Expolanka Holdings, stock analysts said.

Shares rose more than 1.5% in the first hour of trading on hopes of economic stability following President Ranil Wickramesinghe’s policy statement in parliament yesterday. Apart from that, the market has been gaining for five straight sessions as June quarter earnings reports come in and a possible IMF deal nears, market analysts added.

The main All-Share Price Index gained 1.75% or 172 points to 8,080 as the market broke through the psychological benchmark of 8,000 after two months. The most liquid S&P SL20 index climbed 3% or 105 points at the end of the day. The turnover amounted to Rs 2.6 billion with a single visit. One million shares of JKH crossed for Rs 119 million; its shares traded at Rs 119.

In the retail market, the top seven companies that primarily contributed to revenue were; Expolanka Holdings Rs 600 million (3.1 million shares traded), Lanka IOC Rs 268 million (2.6 million shares traded), ACL Cables Rs 202 million (4.4 million shares traded), LOLC Finance Rs 178 million (22.1 million shares traded), Browns Investments Rs 158 million (21.3 million shares traded), LOLC Holdings Rs 77.7 million (188,000 shares traded) and JKH Rs 75.2 million (630,000 shares traded). During the day, 123 million volumes of shares changed hands in 29,000 transactions.

After several weeks of subdued buying, the market is said to have seen momentum on Tuesday as retail and blue chip investors stepped up their buying, targeting heavily discounted stocks across all sectors. Expolanka Lanka Holdings led the market along with other blue chip companies. Its share price increased by Rs 17.50 or 10% to Rs 199.75 from Rs 174.75.

Foreigners are said to have recorded a net outflow of Rs. 16 million, while their stake increased to 9.7 per cent of turnover (the previous day 1.9 per cent). Net overseas purchases exceeded Rs. 7.8 million, while net overseas sales reached Rs. 16 million.

The results reported by dollar earnings and planting counters are also said to have boosted investor confidence. In response to this, the index started off strong and maintained its steep upward trajectory throughout the session and closed the day at a two-month high of 8080, gaining 105 points.

The main contributors to the stock market were Expolanka Holdings (32.9%), LOLC Finance (16.7%), LOLC Finance (11.9%), Hayleys (10.4%, Hayleys (10.4%) and Royal Ceramic (9.5%).

Yesterday, the Central Bank’s US dollar buying rate was Rs 357.22 and the selling rate was Rs 368.49. The rupee is somewhat stable against the dollar due to the Central Bank’s cautious monetary policies, economists said.

Lynn A. Saleh