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S&P SL20 index declines amidst waning turnover; LOLC Group counters recover



By Hiran H.Senewiratne

The CSE managed to push its benchmark index to a positive trajectory though the more active S&PSL20 declined amid waning turnover yesterday. At the beginning profit- takings were noted and the market went down but later it turned positive and settled in positive territory, market analysts said.

The index- heavy Browns Investments share price declined to Rs 16.50 but later settled at Rs 17. The recovery of Browns Investments made other LOLC Group counters and other shares move to a positive momentum.

Softlogic Life Insurance witnessed a 40 per cent gain during the last five days. But yesterday it recorded a Rs 10.90 or 11 per cent price appreciation. Its shares traded at Rs 99.10 and at the end of the day they shot up to Rs 110.

Amid those developments both indices moved upwards. The All -Share Price Index went up by 215.5 points and S and P SL20 shot up by 74.6 points. Turnover stood at Rs 7.07 billion with three crossings. Those crossings were reported in LOLC Finance, which crossed 7.5 million shares to the tune of Rs 205 million, its shares traded at Rs 28, TJLanka 1.4 million shares crossed for Rs 72.3 million, its shares traded at Rs 50 and Browns Investments 1.2 million shares crossed to the tune of Rs 20.3 million; its shares traded Rs 16.90.

In the retail market top seven companies that mainly contributed to the turnover were Browns Investments Rs 636.3 million (37.8 million shares traded), Expolanka Holdings Rs 610 million (1.6 million shares traded), Softlogic Life Rs 368 million (2.4 million shares traded), LOLC Holdings Rs 321 million (237,000 shares traded), ACL Cables Rs 306 million (2.77 million shares traded), Softlogic Holdings Rs 283 million (4.2 million shares traded) and LOLC Finance Rs 236 million (8.2 million shares traded). During the day 253 million share volumes changed hands in 56280 share transactions.

Mixed interest was observed in Expolanka Holdings, Softlogic Life Insurance and Access Engineering while retail interest was noted in SMB Leasing non-voting, Browns Investments and Softlogic Capital. The Diversified Financials sector was the top contributor to market turnover.

Yesterday the US dollar was quoted at Rs 201.50, which was the controlled price of the Central Bank. S&P Global Ratings earlier in the day lowered its long-term sovereign credit rating on Sri Lanka to ‘CCC’, from ‘CCC+’, saying the country’s external position continues to weaken due to elevated external obligations and an uneven access to financing.

S&P said Sri Lanka’s economic recovery would be challenged by the ongoing pandemic and external financial stresses. The rating agency forecast real gross domestic product growth of 2.2% this year, compared with its estimate of 3 per cent expansion in 2021.

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Seven factors of concern at upcoming Monetary Policy Review



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



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



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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