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Bourse’s bullish sentiment boosts indices; tile sector shares appreciate markedly

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By Hiran H.Senewiratne

The CSE saw bullish sentiment among investors which drove both indices up amid a high Rs. 9 billion turnover level yesterday. The manufacturing sector companies, especially tile sector entities, noted a price appreciation while profit-takings were noted in plantations sector counters, stock market analysts said.

Tile sector entities experienced an exceptional price appreciation during the day due to import restriction of tiles and other related products. Those companies were Lanka Tiles, whose share price appreciated by 12.3 per cent or Rs 11.50. Its shares shot up to Rs 103.50 from Rs 92, Lanka Wall Tiles share prices appreciated by 12 percent or Rs 12.50. Its shares started trading at Rs 100.75 and at the end of the day they moved to Rs 113.25. Royal Ceramic share price appreciated by 7.3 per cent or Rs 4.30. Its share price appreciated to Rs 62.30 from Rs 58, Swisstek share price appreciated by 18 percent or Rs 6.30. Its shares started trading at Rs 35 at the end of the day they moved up to Rs 41.30.

Further, other manufacturing sector counters, such as, ACL and Expolanka also witnessed gains in their share prices at the stock market. ACL share prices appreciated by 8 percent or Rs 6.90. Its share price shot up to Rs 92.50 from Rs 85.60 and Expolanka contributed 52 points to the All- Share Price Index. Its share price appreciated by Rs 12 or five percent. Its share price rose to Rs 247.25 from Rs 235.25 at the end of the day’s trading.

The All Share Price Index gained 1 per cent or 171.95 points and the S&P SL20 gained by over 61.50 points. Trading of over 335 million shares boosted turnover to Rs. 9.1 billion with two crossings. Those crossings were reported in Lanka Reality Investments, which crossed 1.5 million shares to the tune of Rs 37.5 million and its shares traded at Rs 25 and Sampath Bank 600,000 shares crossed to the tune of Rs 33 million, its shares traded at Rs 65.

During the day top seven retail market contributors were; Browns Investments Rs 1.7 billion (132 million shares traded), Expolanka Holdings Rs 1.14 billion (4.6 million shares traded), Lanka Reality Investments Rs 650 million (24.8 million shares traded), Swisstek Rs 445 million (11.3 million shares traded), Royal Ceramic Rs 432 million (seven million shares traded), LOLC Finance Rs 383 million (14.2 million shares traded) and LOLC Holdings Rs 341 million (371,000 shares traded), During the day 58000 transactions occurred.

Net foreign selling on the previous day hit a new high of Rs. 934 million, pushing the year-to-date net outflow to over Rs. 49.5 billion. Last week, net outflow topped Rs. 1 billion as well. Further two IPOs were made in Myland and First Capital. Under the Myland IPO they will offer 6.2 million shares at a share price of Rs 12 to raise Rs 75 million. It will be listed in the Divisavi Board and its purpose is to acquire properties for real estate projects in the country. It will start offering from December 8, 2021.

Yesterday the US dollar was quoted at Rs 202.53, which was the controlled price of the Central Bank to control the price increase in essential imported items. Sri Lanka has recorded the highest food price inflation in the recent past. If the Central Bank doesn’t control the dollar rate, prices of essential items will further go up, market sources said.



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Business

Seven factors of concern at upcoming Monetary Policy Review

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by Sanath Nanayakkare

The Central Bank of Sri Lanka (CBSL) is scheduled to announce its latest monetary policy review on 20th January 2022, with all eyes on dwindling foreign reserves and foreign currency exchange in the country.

In this context, First Capital Research has named 7 factors of concern that could be taken into account at the upcoming monetary policy review. They are as follows.

* Foreign Reserves USD 3.1 billion – Dec 2021

* Inflation CCPI 12.1% – Dec 2021

* GDP Growth -1.5% – 3Q2021

* Private Credit LKR 60.5 billion – Nov 2021

* 03M T-Bill rate 8.38% as at 12.01.22

Liquidity and CBSL Holdings LKR -364.0 billion and LKR 1.42 trillion

Balance of Trade (BOT) and Balance of Payment (BOP) USD -6.5 billion and USD -3.3 billion for Jan-Oct 21

First Capital Research’s Policy Rate Forecast – Jan 2022-Apr 2022 notes that they believe the CBSL may highly consider tightening the monetary policy rates in this policy review but given the concerns over economic growth, there is a probability of 40% for CBSL to maintain its policy stance at current levels.

“With high frequent indicators improving in line with expectations, we have eliminated any probability of a rate cut. We expect a continued increase in probability for a rate hike in order to prevent overheating of the economy amidst the given fiscal and monetary stimulus,” they said.

As per First Capital’s view, CBSL either can choose to hike policy rates by 50bps or 100bps or hold policy rates steady, while a rate cut is off the table due to the high debt repayment and the high domestic borrowing requirement.

First Capital believes that there is a 60% probability for a rate hike due to the remedial actions required in achieving external stability.

However, there is also a 40% probability to maintain the policy rates at its current level in order to further improve the high frequency indicators.30%, they noted.

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Sri Lanka’s dash brand enters international markets

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Multichemi International Ltd, which manufactures and distributes a wide range of products under dash, one of Sri Lanka’s leading detergent and household care brands, has begun exporting its products to several international markets in Asia and Oceania, with plans also to enter Africa. The dash brand includes a wide range of products in car care, household care, home fragrances and laundry care sectors. Multichemi International Ltd, which has been awarded ISO 9001:2015 certification, is a Sri Lankan pioneer in environment-friendly cleaning products, having launched the country’s first biodegradable, safe cleaning products over 28 years ago.

Amila Wijesinghe, General Manager of the Company said,”Having conquered the domestic market, we are now ready to capture the international market. We are confident that our products which are of high quality will receive a good demand overseas as well. The feedback we have received so far from our overseas customers is extremely encouraging. We are dedicated to taking our products to the international market, to bring in foreign currency to the country and help uplift the economy”,

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Janaka Abeysinghe appointed SLT CEO

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Sri Lanka Telecom PLC has announced the appointment of Janaka Abeysinghe as its Chief Executive Officer (CEO) with effect from February 1, 2022.

The incumbent CEO Kiththi Perera will be overseas on leave for a period of two years to pursue higher studies, according to a stock market filing by the company.

Abeysinghe joined SLT in 1991. In his present role, he leads the enterprise and wholesale business of SLT that provides integrated voice and data solutions to enterprises, government institutions, domestic telco operators and global wholesale carriers.

In his career at SLT spanning 29 years, he has held a number of senior positions, including general manager Enterprise and International Sales and has extensive experience in the areas of Enterprise Digital Services, Enterprise Communications Solutions, Data Communications, Business Development, Domestic and International Switching Operations and Global Wholesale Voice & Data Business.

He holds a Master’s Degree in Electrical and Computer Engineering from the University of Kansas, USA and a BSc degree in Electronics and Telecommunications Engineering with a First Class Honours from the University of Moratuwa.

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