CSE investors are increasingly turning to government securities – The Island
By Hiran H. Senewiratne
The current economic collapse and political instability discourage investors from investing in CSE. They seek risk-free investments, such as government securities, CSE analysts said.
Federal Reserve spokesman Jerome Powell, who sparked a global commodity and food price bubble by printing large amounts of money into a healthy US banking system, raised rates by 50 points base and promised to withdraw cash by selling Treasuries and agency debt, market analysts said.
In this scenario, Sri Lanka and many developing countries face rising food and energy prices (in US dollars) due to policy errors by the Fed, which is primarily driven by a employment. It has also created concerns for the CSE’s business, market analysts added.
Amid these developments, the market started trading on a positive note yesterday, but then turned negative due to external and internal environmental factors. Consequently, both indices fell. The All-Share Price Index fell 30.4 points and S and P SL20 fell 32.3 points. The turnover amounted to Rs 824 million with a single crossing. The crossover took place in Melstacorp, which crossed 800,000 shares at Rs 29.6 million; its shares traded at Rs 37.
In the retail market, the top seven companies that primarily contributed to revenue were; Expolanka Holdings Rs 221 million (1.3 million shares traded), Lanka IOC Rs 102.9 million (2.9 million shares traded), JKH Rs 102.2 million (793,000 shares traded), Royal Ceramic Rs 50 million (1.7 million shares traded), LOLC Holdings Rs 29.4 million (64,000 shares traded), Browns Investments Rs 20.7 million (3.6 million shares traded) and LOLC Finance Rs 16.4 million (2.6 million shares traded). During the day, 74 million volumes of shares changed hands in 11,000 transactions.
Mixed interest was seen from Expolanka Holdings, LOLC Holdings and Lanka IOC, while retail interest was noted from Browns Investments, SMB Leasing and LOLC Finance.
The transport sector was the main contributor to market turnover (thanks to Expolanka Holdings), while the sector index lost 2.80%. Expolanka Holdings share price declined by Rs 4.75 (2.8%) to close at Rs. 164.75.
The diversified financial services sector was the second largest contributor to market revenue (thanks to LOLC Holdings and LOLC Finance), while the sector’s index rose 3.87%. LOLC Holdings’ share price gained Rs. 36.75 (8.40%) to close at Rs. 474.25. LOLC Finance’s share price declined by Rs. 0.10 (1.47%) to close at Rs. 6.70.
Yesterday, the Central Bank announced that the buying rate for the US dollar was 356.83 rupees and the selling rate was 369.99 rupees. In the curbside market, this amount would be close to Rs 400.
