CSE continues on bullish trajectory as blue chip stocks prove attractive to foreign investors

By Hiran H.Senewiratne

CSE trading activities continued on a bullish trajectory yesterday due to blue chip company stocks becoming more attractive to foreign investors. Foreign buying interest was noted mainly in blue chips, such as, Expolanka Holdings, Lanka IOC and JKH, stock market analysts said.

The stock market has also gained due to some positive sentiments from investors based on hopes of macroeconomic stability. On the previous day, Expolanka had 19 crossings and early in the session previous to that, it had 53 crossings. The shares in the market heavyweight gained 3 per cent to Rs 231, market sources said.The market saw a net foreign inflow of Rs 399 million on the previous day. The net foreign inflow so far this year is Rs 4.44 billion after the bourse saw Rs 5.83 billion of net foreign buying in the last 18 consecutive sessions amid positive sentiment over an IMF deal.

Amid those developments both indices moved upwards. The All- Share Price Index moved up by 153 points and S and P SL20 rose by 83.4 points. Turnover stood at Rs 4.1 billion with three crossings. Those crossings were reported in Royal Ceramic, which crossed 3.3 million shares to the tune of Rs 122 million, its shares traded at Rs 36.50, JKH, 660,000 shares crossed to the tune of Rs 84.5 million, its shares fetched Rs 128 and Richard Pieris one million shares crossed for Rs 32 million; its shares traded at Rs 32.

In the retail market seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 486 million (two million shares traded), Lanka IOC Rs 475 million (two million shares traded), JKH Rs 313 million (2.4 million shares traded), Royal Ceramic Rs 187 million (4.8 million shares traded), Melstacorp Rs 165 million (2.7 million shares traded), ACL Cables Rs 163 million (2.1 million shares traded) and Kotagala Plantations Rs 142 million (11.9 million shares traded). During the day 173 million share volumes changed hands in 38000 transactions.

The IMF announced that it reached a staff-level agreement with Sri Lanka on Sept 1, with a possible 48-month US $ 2.9 billion Extended Fund Facility (EFF) being provided, once debt restructuring is done. Sri Lanka also submitted a reform-oriented interim budget for 2022 on August 30 which was seen as market positive.The budget is aimed at almost doubling the tax-to-GDP ratio to 15 per cent by 2025 from 8.2 per cent at the end of 2021.Yesterday, the CBSL’s US dollar buying rate was Rs 358.53 and the selling rate Rs 369.50.