Selling pressure on banking sector counters following budget speech

By Hiran H.Senewiratne

The stock market performed in a negative manner yesterday mainly due to President Ranil Wickremasinghe’s reference in his budget speech to certain weaknesses in the banking sector, specially the two main state banks. Consequently, there was some selling pressure on banking sector counters, stock market analysts said.

The fact that tourism sector loans are still underperforming and the delay in Sri Lanka getting the IMF second tranche also created negative sentiments for the local and foreign investors in the stock market. Amid those developments both indices moved downwards. The All- Share Price Index went down by 115 points and S and P SL20 declined by 41.1 points.

Turnover stood at Rs 892 million with one crossing. In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 150 million (779,000 shares traded), Capital Alliance Rs 87 million (1.3 million shares traded), Dialog Rs 49.4 million (5.5 million shares traded), Sampath Bank Rs 49.3 million (714,000 shares traded), NTB Rs 41.4 million (390,000 shares traded), CTC Rs 32.5 million (33000 shares traded), Hayleys Rs 28.6 million (360,000 shares traded). During the day 37 million share volumes changed hands in 9011 transactions.

Further, market participants said that though investors were relieved that there was no capital gains tax announced in the budget as was rumored, they continued to wait for the debt structuring to be completed and the second tranche from the IMF to come.

Yesterday, the rupee opened at Rs 326.75/327.25 to the US dollar, from Rs 326.50/327.00 on the previous day, dealers said.

Bond yields were down. A bond maturing on 15.01.2027 was quoted at 14.60/70 percent from 14.90/15.00 percent. A bond maturing on 01.07.2028 was quoted stable at 14.60/75 percent.