ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.
The broader All Share Index closed down 0.24 percent, or 27.24 points, at 11,504; while the more liquid S&P SL20 Index closed down 0.24 percent, or 8.04 points, at 3,300.
Turnover was 539 million.
“We saw turnover tumbling after the past two days,” Softlogic Stockbrokers said. “We feel that differing polls on the possible outcome of the presidential election is disturbing investors.”
“Nothing seems to be certain, and the fact that the tables could turn and there could be new people in power is making investors anxious.
“This sentiment could continue for the next month.” Sri Lanka’s presidential election will be held a month from this week on September 21.
There were two crossings recorded; Renuka Holdings Plc contributed 23 million to the turnover. The share closed up at 13.00 rupees.
Melstacorp Plc saw some foreign buying interest after days of foreign selling. The share closed up at 82.00.
There was s net foreign inflow of 2.5 million recorded in the day.
“Foreign participation remained low. It’s been below 30 million for some days now. At one point it was high, and this could have continued if not for the polls.”
Uncertainty around treasury bill rates also contributed to investors moving out of equity, they said.
“There are mixed signals, we see rates moving up across the shorter term bills, possibly because the government needs money for the election. If the rates come down people will move back into equity.
“The policy upward movement is certainly putting pressure.”
Top contributors to the turnover were Access Engineering Plc (up at 22.30), Chevron Lubricants Lanka Plc (up at 121.00), Renuka Holdings, Sampath Bank Plc (flat at 77.20) and Kelani Tyres Plc (up at 78.00), and Aitken Spence Plc (up at 118.75).
“We have noticed that companies with an exposure to the auto industry are picking up, they are seeing renewed interest maybe based on the expectation that the import restrictions will be lifted in the future.”
“There’s also a pick-up in the construction industry stocks. For two reasons; one is that most companies have reported good first quarter results in a usually dull first quarter.
“Secondly with cement prices and some building material costs having come down they seem to be pushing volume growth in the sector.” (Colombo/Aug16/2024)