Share market under a bearish cloud following clamping of reciprocal tariffs by US

The CSE was extremely bearish and dropped sharply yesterday after US President Donald Trump announced new reciprocal tariffs, with Sri Lanka among the countries charged the highest such tariffs. Consequently, selling pressure was witnessed because local firms are likely to be hit by these measures on account of their exposure to the US export market, the research arm of Capital Alliance Holdings Limited (CAL Group) said.

The reciprocal tariff rate on Sri Lanka at 44 percent was the 6th highest such imposed tariffs in the sweeping measures announced to be in effect from April 9.

Amid those developments both indices moved downwards. The All Share Price Index went down by 361 points, while the S and P SL20 was down by 122.95. The turnover stood at Rs 3.8 billion with four crossings.

Those crossings were reported in JKH, which crossed 16.9 million shares to the tune of Rs 338 million and its shares traded at Rs 20, VallibelOne 1.8 million share volumes changed hands for Rs 110 million and its shares traded at Rs 51, Commercial Bank 560,000 shares crossed for Rs 78.7 million; its shares traded at Rs 138 and Sampath Bank 500,000 shares crossed for Rs 56.7 million; its shares traded at Rs 113.5.

In the retail market top six companies that mainly contributed to the turnover were; Tea Small Holders Rs 395 million (11.3 million shares traded), JKH Rs 280 million (822,000 shares traded), HNB Rs 246 million (822,000 shares traded), Commercial Bank Rs 228 million (1.6 million shares traded), Dipped Products Rs 187 million (3.5 million shares traded) and Hayleys Rs 178 million (1.3 million shares traded). During the day 123 million share volumes changed hands in 22000 transactions.

It is said that manufacturing companies contributed mainly to the turnover, especially with JKH, while banking and financial sector counters were the second largest contributor to the turnover, especially on account of HNB and Commercial Bank.

Meanwhile, Sri Lanka diversified conglomerate JKH said it sold its 37.62 percent equity stake in Tea Smallholder Factories PLC, a subsidiary of JKH, to a subsidiary of the LOLC Group.

JKH sold a share at Rs 35 for a total consideration of Rs 395 million. The stake comprised 11,286,000 ordinary shares, the company said in a stock exchange advisory, sources said. “Out of the total ordinary shares divested, 11,276,839 ordinary shares were purchased by Udapussellawa Plantations PLC, a subsidiary of the LOLC Group, the advisory said.

Meanwhile, the rupee was quoted at Rs 296.75/297.25 to the US dollar, to close weaker from Rs 296.02/07 the previous day, while bond yields were drastically up, dealers said. A bond maturing on 15.10.2028 quoted at 10.35/45 percent, up from 10.15/22 percent. A bond maturing on 15.06.2029 was quoted at 10.65/85 percent.

By Hiran H. Senewiratne