By Hiran H. Senewiratne
The CSE turned negative yesterday after trading with a bullish run for 12 straight days due to profit taking by many counters, especially the top-notch counters. This move could be seen as the market’s correction, stock analysts said.
Sri Lanka shares fell more than 1% in midday trading, dragged down by retail stocks after gaining for 13 sessions. The main All-Share Price Index fell 0.82% or 75.55 points to 9,115.97 in the middle of the session.
“In some stocks there is some profit taking, but overall the market has risen around 2200 points in the last 12 sessions, so we have seen investors turn to stocks in the oil and gas sector. energy and plantations from the usual Expolanka, Browns Investments, Browns, LOLC and LOLC Finance, said a senior analyst.
In recent weeks, shares of Lanka IOC and the plantation sector have driven the index higher. Lanka IOC shares became the most sought after and due to the severe fuel shortage, they made enough sales and recorded high profits, while shares in the plantation sector rose due to the appreciation dollar against the rupee, market analysts said.
“There is also a reaction in the counters in the banking sector, with banks adjusting to the IBS restructuring and also higher writedowns in the sector. Therefore, we are also seeing a sell-off in the bank counters , analysts said.
However, the indices were a little timid due to profit taking. ASPI gained 1.8% and the S&P SL20 improved 0.8%. The All-Share Price Index fell 105.2 points and S and P SL20 fell 60.2 points. The turnover amounted to Rs 5.4 billion with two crossings. These crossings were reported to Hunas Falls which crossed 1.4 million shares at Rs 54.7 million with its shares trading at Rs 40 and Hela Apparel 3.7 million shares crossed at Rs 48.9 million, with its shares trading at Rs 13.
In the retail market, the top seven companies which mainly contributed to the turnover were Lanka IOC Rs 1.5 billion (4.8 million shares traded), Expolanka Holdings Rs 665 million (three million shares traded ), Browns Investments Rs 459 million (52.1 million shares traded), ACL Cables Rs 320 million (4.2 million shares traded), LOLC Holdings Rs 141 million (230,000 shares traded), Hayleys Rs 117 million (1.1 million shares traded) and EML Consultants Rs 111 million (21 million shares traded). During the day, 222 million volumes of shares changed hands in 42,000 transactions.
The market is said to have continued its run in the green; however, witnessed some profit taking in the active counters after several winning sessions. Lanka-IOC, Expolanka and Hayleys, which have seen strong gains recently, closed in the red.
It is said that high net worth and involvement of institutional investors have been noted in Lanka IOC, Melstacorp and Royal Ceramics. Mixed interest was seen for Hayleys and Vallibel One, while retail interest was noted for Browns Investments, SMB Leasing and Softlogic Capital.
The capital goods sector was the biggest contributor to market revenue (thanks to Hayleys), while the sector index gained 2.86%. Hayleys share price recorded a loss of Rs. 3.75 (3.18%) to close at Rs. 114.25.
The food, beverage and tobacco sector was the second largest contributor to market revenue (thanks to Browns Investments and Melstacorp) while the sector index rose 3.39%. Browns Investments’ share price gained 70 cents (8.54%) to close at Rs. 8.90. Melstacorp’s share price appreciated by 80 cents to close at Rs. 55.60. Separately, Lee Hedges PLC announced a cash dividend of one rupee per share.
Yesterday, the Central Bank announced that the buying rate for the US dollar was 357.37 rupees and the selling price was 368.68 rupees.