Selling pressure on banking sector counters

By Hiran H.Senewiratne

The Colombo Stock Exchange (CSE) witnessed some selling pressure in banking sector counters yesterday due to the Central Bank imposing a ceiling on lending rates for banks and financial sector institutions, stock market analysts said. The Central Bank lowered rates for the second time in four months on Aug. 23 to boost sluggish growth after tourism and investments plummeted following the Easter Sunday bomb attacks, Central Bank sources said.

Sri Lanka rupee opened stronger at 180.40/45 to the US dollar, while bond yields were slightly up in a dull market and stocks opened 0.08 percent higher, brokers and dealers said. The rupee closed at 180.50/60 against the greenback in the spot market.

Amid those developments, both indices showed mixed reactions, ie, the All Share Price Index was up by 11.77 points and S and P SL20 went down by 13.46 points. The day's turnover stood at Rs. 715.3 million with two crossings. Those crossings were reported from Melstacorp, which crossed 4.1 million shares to the tune of Rs. 180.2 million, per share value Rs. 43.50 and Citizens Development Bank 517,000 shares crossed for Rs. 54.2 million, per share value Rs. 95.

In the retail market companies that mainly contributed to the day's turnover were Browns Investments Rs. 147.5 million (29.1 million shares traded), Sampath Bank Rs. 87.1 million (550,000 shares traded), Union Bank Rs. 40.7 million (3.2 million shares traded), Renuka Capital Rs. 38.7 million (13.8 million shares traded) and First Capital Rs. 17.3 million (320,000 shares traded). During the day 15.6 million share volume changed hands in 4899 transactions.Browns Investment gained 10 cents to Rs. 5.00 a share, Dialog Axiata was up 20 cents at Rs. 10.70  a share and Brown and Company gained Rs. 2.00  to Rs. 74.00  a share, contributing to the gain of the ASPI.

 The rupee ended 0.2 percent  firmer at 180.40/60 per dollar, edging up from its lowest since Jan. 28 that was hit on Friday. It closed at 180.80/181.00 on Friday. The currency is up 1.2 percent  this year.

 Foreign investors sold government securities worth Rs. 500 million  in the week ended Sept. 4, data showed, extending the year to date net foreign outflow to Rs. 53.7 billion  through Sept. 4, Central Bank data showed. Foreigners sold Rs.  25.7 billion  worth of government securities in the previous two weeks.

 So far this year, the stock index has dropped about 3.9 percent. Equity market turnover was Rs. 381.5 million on Monday, around half of this year’s daily average of about Rs. 649.1 million so far. Last year’s daily average was Rs. 834 million.

Foreign investors sold a net Rs.  1.1 million  worth of shares on Monday, extending the year-to-date net foreign outflow to Rs1.73 billion  worth of equities, according to index data.

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