Proposal to sell 20 percent stake in two state banks enlivens share market

By Hiran H.Senewiratne

Although the stock market was sluggish throughout yesterday, it received some vigour when President Ranil Wickremesinghe presented budget 2024 in parliament as the Finance Minister and announced that a 20 percent stake in the two state banks, namely, the People’s Bank and the Bank of Ceylon, would be sold to enliven the capital market, analysts said.

The government plans to sell a 20 percent stake in state banks to strategic investors or the public, President Ranil Wickremesinghe said. “I propose that 20 percent of the shares of the two large state-owned banks should be given to strategic investors or the public to improve capital and support the future growth of the two state-owned banks to reduce the burden on taxpayer funds, he said while presenting the budget.

The 2024 budget has proposed several tough measures, including prosecuting those who fail to file tax returns and making submission of a copy of the Certificate of the Taxpayer Identification Number (TIN) mandatory for several transactions. The moves come after the government failed to achieve its 1 million target on new tax files this year.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 10 points while the S and P SL20 rose by 7.6 points. Turnover stood at Rs 559 million without any crossings. In the retail market top seven companies that mainly contributed to the turnover were; Capital Alliance Rs 118 million (1.75 million shares traded), JKH Rs 31.3 million (161,000 shares traded), Ceylon Grain Elevators Rs 24.8 million (135,000 shares traded), Hayleys Rs 22 million (273,000 shares traded), Hayleys Fabrics Rs 20.5 million (483,000 shares traded), Browns Investments Rs 19.3 million (3.8 million shares traded) and CIC Holdings Rs 18.3 million (266,000 shares traded). During the day 19.2 million share volumes changed hands in 8570 transactions.

Yesterday the rupee opened flat at Rs 327.00/40 to the US dollar from Rs 327.00/50 on Friday, dealers said.

Bonds were not being actively quoted as investors adopted a wait-and-see approach ahead of the 2024 budget reading yesterday.