Sri Lanka stocks ease from record highs, punters pounce on banks

ECONOMYNEXT – Sri Lanka stocks fell 1.4 percent from a record high on Wednesday as some high flying stocks lost steam to profit taking but buyers have latched on to banks have been trailing the market up to now, brokers said.

Colombo’s All Share Price Index fell 1.43 percent or 113.69 points to close at 7,808.97 from Monday’s all-time high stock exchange provisional data showed.

ASPI Started positive but fell to a daily low at 7,756.62 during the last hour of trading but picked up to close marginally high.

The S&P SL20 index of more liquid stocks gained 1.86 percent or 55.73 points at 3,059.03.

The market turnover was 11.4 billion rupees with 78 stocks gaining and 138 falling.

The market reached 7,945.01 points on Monday closing just short of 8,000 points, in what technical analysts call a psychological resistant level.

The December quarter earnings season is just starting.

As the broader market fell, banks stocks gained as punter pounced on financial stocks.

Commercial Bank gained 7.50 rupees a share to close at 96.20 rupees a share arresting the ASPI fall and Sampath bank gained 15.25 rupees a share to close at 162.00 rupees.

“Pan Asia bankuwater ridenner gahuwar, (Pan Asia Bank was hit till it hurt)” one market analysts said in pithy Sinhalese.

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Pan Asia Bank closed 24 percent higher at 18.60 rupees, up 3.60 rupees a share.

Hatton National Bank gained 6.75 rupees a share up by 6.03 percent to close at 118.75 rupees and DFCC bank gained 2.70 rupees a share to close at 70.60 rupees a share.

Sri Lanka’s stocks have soared amid low interest rates and money printing but many firms have also been reporting strong earnings after a slump in March due to lockdowns ended.

Banks have given moratoriums and their numbers are uncertain, but interest rates have fallen, which reduces deposit rates and also helps borrowers, analysts say.

Some banks have also brought sovereign bonds at steep discounts, which are also likely to bring gains.

However there are concerns over the balance of payments amid money printing. Sri Lanka’s economic momentum is usually arrested by currency collapses due to monetary instability coming from artificially low interest rates and liquidity injections.

On Tuesday some stocks which saw steep gains in recent weeks fell back amid profit taking.

LOLC Holdings which was a top gainer during the past few days slid 29.75 rupees a share closing at 235.50 rupees and LOLC finance a subsidiary of LOLC, fell 1.60 rupees to close at 7.80 rupees and Browns Investments fell 40 cents to close at 6.90 rupees a share.

Access Engineering Plc, which has been driven up partly on expectations of roads and expressway contracts gained 60 cents to close at 30.50 rupees a share while Expolanka Holdings fell 3.80 rupees to close at 50 rupees a share.

In the hotel sector Eden Hotel Lanka closed 90 cents down at 12.90 rupees a share, Sigiriya Village hotel closed 70 cents down at 34.30 rupees, Aitken Spence Hotel holdings fell 80 cents to close at 34.10 rupees whileJohn Keels Hotels closed 20 cents up at 11.20 rupees a share.

Sri Lanka Telecom closed 1.20 rupees down at 40.00 rupees and Melstacorp Plc closed 3.00 rupees down at 60.20 rupees. Distilleries Company fell 60 cents to close at 23.20 rupees, as its parent Melstacorp sold down part of its holding for the second day.

John Keells Holdings closed 1.00 rupee downat 160.25 rupees a share and Richard Pieris Company closed 20 cents down at 15.70 rupees.

Ceylon Tobacco Company fell14.50 rupees to close at 1,109.75 rupees and Ceylon Cold stores closed 1.50 rupees up at 709.00 rupees a share.

Hayleys Plc closed 75 cents down at 497.50 rupees while Hemas Holdings closed 60 cents down at 95.00 rupees.

Nestle Lanka closed 27.25 rupees down at 1,276.50 rupees while Dialog Axiata closed 10 cents up at 12.70 rupees.

Sri Lanka record a net foreign sales of 123 million rupees today.

The Bank industry was the most active, gained 7.5 percent and Capital Goods Industry which was also active fell 1.7 percent today. (Colombo/January 19/2021)

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