By Hiran H.Senewiratne
Macroeconomic uncertainty coupled with political instability triggered circuit brakes on the CSE yesterday as well. Margin calls by stock brokers and margin providers pave the way for forced selling of stocks, which negatively impacts the CSE, stock market analysts said.
A margin call occurs when the value of securities in a brokerage account falls below a certain level, known as the maintenance margin, requiring the account holder to deposit additional cash or securities to meet the margin requirement.
Amid those developments the CSE closed after the more active index slumped by 10 per cent for the second consecutive session. The S&P SL 20 index fell by over 5 per cent early in the morning too as investors continue to be bearish over the worsening economic and political crisis.
Yesterday the market closed within minutes of opening after indices crashed, triggering two trading halts. Year to date, CSE has plunged by 50 per cent as against an 80 per cent gain in 2021.
Yesterday both indices moved downwards. The All- Share Price Index went down by 608 points and S and P SL20 declined by 232 points. Turnover stood at Rs 800 million with a single crossing. The crossing was reported in Commercial Bank, which crossed 2.2 million shares to the tune of Rs 110 million; its shares traded at Rs 50.
In the retail market top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 174 million (1.1 million shares traded), Commercial Bank Rs 160 million (3.2 million shares traded), LOLC Holdings Rs 41.7 million (154,000 shares traded), Browns Investments Rs 26.6 (6.6 million shares traded), Chevron Lubricants Rs 23.7 million (654,000 shares traded), Access Engineering Rs 17.2 million (1.4 million shares traded) and Sunshine Holdings Rs 17 million (645,000 shares traded). During the day 91.7 million share volumes changed hands in 2000 transactions.
Standard and Poor, a rating agency, said it had cut Sri Lanka’s sovereign rating to ‘selective default’.
Individual securities were downgraded to default of D, the rating agency said. Sri Lanka has 30 days to make payment on the relevant coupon which fell due on April 18.
“We do not expect the government to make the coupon payments within 30 calendar days after their due dates, Standard and Poor’s said. Sri Lanka does not plan to restructure domestic debt.
“In our view, achieving a more sustainable fiscal position will require restructuring the government’s local currency debt, S and P said.
Yesterday, the Central Bank announced the official US $ buying rate as Rs 333.88 and the selling rate as Rs 346.49. However, in the kerb market it’s close to Rs 400 per US $, financial sources said.
Seylan Bank takes the lead to promote LANKA QR beyond Western Province
Seylan Bank, the Bank with a Heart, organized the ‘Seylan Pay QR Carnival’ in Kurunegala to promote the LANKAQR programme introduced by the Central Bank of Sri Lanka (CBSL) to strengthen digital transactions in Sri Lanka. The special programme, focusing on encouraging local merchants and SMEs to join the national QR transaction system, took place at the Vehera Sports Ground in Kurunegala recently. Officials from the Central bank of Sri Lanka, the Lanka QR Committee and partner banks were present at the event.
Organised as the 14th leg of the LankaQR national rollout campaign, the Seylan Pay QR Carnival set a firm footprint with the highest number of merchants at the event. Seylan Bank alone on boarded over 100 merchants for the SeylanPay payment solutions from the Kurunegala area. Over a thousand customers walked in during the event which benefitted many merchants accepting LankaQR, to process transactions on the day and generate great traction in the district since then.
As the key feature of the event, Seylan Bank educated their customers on the use of the Bank’s QR payment system, the SeylanPay Mobile App, and assisted customers in making payments to merchants. Over 50 stalls selling clothes and accessories, gift items, food, sweets, electronics and electrical equipment, plants, beauty care, cosmetic items and automobile parts were set up for the benefit of consumers, with attractive added discounts for customers using QR payment systems to purchase items, thereby encouraging and familiarizing the use of it among them. This marked a record high number of merchants participating among many LankaQR nationwide rollout campaigns that were organised to date. A Seylan Bank Mobile ATM was deployed at the premises, ensuring that customers had easy access to carry out cash withdrawals if required and check their account balances at any given time. In addition, a special fun zone was set up for children at the event premises, whilst a musical evening entertained the adults present at the Seylan Pay QR Carnival.
“Seylan Bank’s commitment to develop the banking and finance network together with the industry led to us hosting the 14th leg of the Lanka QR national rollout campaign. We also realize the potential this system brings to the SME sector in the country, in terms of transaction efficiency and savings. As a bank that has continued to support SMEs in the country in a wide spectrum, the alliance with Lanka QR helps in developing the entire transaction ecosystem of the country,” commented Chaminda Senewiratne, Head of Digital Banking Channels, Seylan Bank.
The Central Bank of Sri Lanka introduced the LANKAQR service in October 2020 with the aim of moving towards a cash-less society while increasing financial inclusion in Sri Lanka, and was supported in this endeavour by Banks, licensed financial institutions and Lanka Clear (Pvt.) Ltd. It has already stood out as an attractive option with notable benefits for small and medium enterprises.
Stylish Garments unveils its latest export-oriented BOI factory in Ambalangoda
With the Board of Investment (BOI) widening its projects, Stylish Garments (Pvt) Ltd, unveiled its sixth BOI approved factory in Ambalangoda which manufactures children’s wear, jerseys including school uniforms exclusively targeting the international market. The Stylish Garments is a renowned a garment manufacturer and exporter of jersey knit and lighter woven apparel products.
The latest project, which is a USD 3.5 million investment, is to generate 500 employment opportunities for people living in the south and other parts of the country. Moreover, the products are slated to be exported to the UK and Europe. The agreement in this regard was signed recently at the BOI Head Office in the presence of BOI Director General Renuka M Weerakone.
The Director General said “A project of this nature should be recognized owing to the fact that it depicts the vibrant and vivid expansion of BOI projects, which has now started to reach the rural areas, The new venture will uplift the livelihood of the people living in the Ambalangoda area plus become a crucial source of bringing dollars to the country in a situation where the country isin dire need of dollars,” she underscored.
Founder and incumbent Chairman of the Stylish Garments (Pvt) Ltd Leelaratne Hattanarachchi said,” we were determined to launch the project irrespective of current challenges because such new projects would bring dollars to the country. That’s the very reason why I ventured to start operations at this new factory by turning the advantage of this crisis to ourselves. At the same time, we do appreciate the support rendered by the BOI at this critical juncture and look forward their support in future too.”
Browns Investments solar power plant deal dominates CSE trading
By Hiran H. Senewiratne
CSE’s leading listed company, Browns Investments, disposed of 50.1 per cent of its stake in Sagasolar Power Power (Private) Limited to another leading company, Aitken Spence Pvt. Ltd. yesterday, market sources said.
The total value of the company was Rs 1.4 billion and under this deal Browns Investments sold the stake for Rs 700 million. The capacity of the solar power plant is 10 megawatts, stock market analysts said.
Sagasolar Power built the solar PV facility on 45 acres (18.2 ha) of land within a dedicated energy development area in Baruthankanda, Hambantota district, Southern province. The country’s previous largest solar plant is a 1.3-MW facility also located in Hambantota.
Amid those developments, the trading activities in the stock market turned negative due to macro and micro economic uncertainties. Accordingly, stocks slipped over 1 per cent at mid-day trade yesterday for the third consecutive day, market analysis said.
The All- Share Price Index fell by 121 points and S and P SL20 went down by 50.8 points. Turnover stood at Rs 982 million without any crossings. Top seven companies that that contributed to the turnover were, Lanka IOC Rs 274 million (3.5 million shares traded), Expolanka Holdings Rs 185 million (1.2 million shares traded), JKH Rs 77 million (626,000 shares traded), LOLC Finance Rs 59.8 million (9.9 million shares traded), Browns Investments Rs 58.9 million (8.9 million shares traded), LOLC Holdings Rs 32.6 million (89,000 shares traded) and Commercial Bank Rs 15.4 million (309,000 shares traded). During the day 51.5 million share volumes changed hands in 14000 share transactions.
Yesterday the Central Bank announced US dollar buying rate was Rs 356.04 and the selling price Rs 367.33.
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