Main CSE indices dip; crossings dominate

By Hiran H.Senewiratne

The CSE was sluggish yesterday because more than 74 percent of the  day's turnover was  from two crossings or arranged transactions. Consequently, both indices pointed downwards. The All Share Price Index was down by 26.72 points and S and P SL20 down by 4.34 points, stock market analysts said. 

The market turnover stood at Rs. 489.5 million with two crossings. Those crossings were; Commercial Bank, which crossed 3.6 million to the tune of Rs. 318.4 million, per share value Rs. 88 and JKH 270,000 shares crossed for Rs. 44 million; per share value Rs. 163. In the retail market, the top five companies that mainly contributed to the day's turnover were; Browns Investments Rs. 25.9 million (7.4 million shares traded), HNB Rs. 16.7 million (104,000 shares traded), Commercial Bank Rs. 11.6 million (129.4 million shares traded), Sampath Bank Rs. 6 million (39,000 shares traded) and JKH Rs. 5.6 million (34,500 shares traded). During the day 12.3 million share volumes changed hands in 2992 transactions.

The Commercial Bank crossing was transacted below the market price. Normally, a Commercial Bank share price is Rs. 90 and in this crossing it was transacted at Rs. 88, stock market analysts said.    

 Lanka Realty Investments PLC was up 11.11 percent to Rs.38.00 a share, contributing most to the ASPI’s gain.

Brown & Company PLC gained Rs. 2.00  or 2.42 percent to Rs.  84.50  a share while the Janashakthi Insurance Company PLC stock opened flat at Rs. 30.00 a share, also contributing to the ASPI’s increase.

Sri Lanka’s rupee was quoted marginally weaker at 181.30/40 to the US dollar in the spot market on Monday, while bond yields opened flat.A debt moratorium for Sri Lanka’s small and medium enterprises is credit negative for banks and the sovereign, and may not boost economic growth, Moody’s a rating agency has warned.

"The debt moratorium is credit negative for Sri Lankan banks and the sovereign because it risks increasing SMEs’ risk appetite and relaxing their attitude toward debt repayments, the rating agency said in a research note. This also affected banking stock prices, stock market analysts said.

Among banks rated by Moody’s Hatton National Bank (B3 stable) and Sampath (B3 stable ) will be most affected by the moratorium. Bank of Ceylon (B3 stable) will be least affected because it is lending mostly to state enterprises and large domestic companies, the rating agency said. Sri Lanka bank bad loans rose from about 3.0 percent in 2017 to 4.8 percent in September 2019. 

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