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Stock market investors concerned about sudden fuel price hike

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By Hiran H.Senewiratne

Trading activities at the Colombo Stock Exchange (CSE) yesterday showed a positive trend in the beginning due to the newest entrant to the stock market hSenid’s shares started with a 100 percent premium, however, profit takings led to a severe drop in the market by 200 negative points in mid session. Nevertheless, the latter part of the day showed some recovery in trading, stock market analysts said. The stock market investors were concerned about the sudden fuel price hike as it was an indication that the government has decided to implement rigorous reforms as if it were involved in an IMF programme, analysts said.

However, the last season of trading showed firm recovery, they said.Sri Lankan multinational software solutions provider, hSenid’s IPO opened on December 3 and was oversubscribed in a matter of hours, receiving over Rs. 9.3 billion worth of applications from 10,602 applicants, for a total subscription of 745,014,900 shares.This makes hSenid’s IPO one of the most oversubscribed issues in recent times, having drawn active interest from a diverse spectrum of both local and foreign investors including institutions and high-net-worth individuals. Amid those developments  both indices moved downwards. All Share Price Index down by 9.19 points and S and P SL20 down by 5.13 points. Turnover stood at Rs 4.02 billion with a single crossing. The crossing was reported in Melstacope, which crossed 500,000 shares to the tune of Rs 27 million and its share price traded at Rs 54.

In the retail market to seven companies that mainly contributed to the turnover were Expolanka Rs 569 million (1.5 million shares traded), hSendid Rs 549 million (24.5 million shares traded), Lanka IOC Rs 437 million (8.8 million shares traded), Browns Investments Rs 302 million (21.8 million shares traded), Hayleys Rs 281.9 million (2.2 million shares traded), Royal Ceramic Rs 187.2 million (2.6 million shares traded) and LOLC Holdings Rs 128.5 million (117,000 shares traded). During the day 81.5 million share volume changed hands in 43541 transactions.



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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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Business

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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