CSE snaps losing streak

Wednesday, 16 May 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares ended firmer on Tuesday, edging up from a near five-week closing low hit in the previous session, led by Ceylon Cold Stores Plc, while the recent fuel price hike weighed on sentiment, stockbrokers said.

The day’s turnover slumped to near one-month low as investors stayed on the sidelines, they said.

State-run fuel retailer Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to the hike in oil prices, while Lanka IOC, a subsidiary of Indian Oil Corp, increased fuel rates the same day.

“It was a slow day and market participation was very low as the investors are still awaiting to see the real economic impact of the fuel price hike,” said Hisham Haniffa, assistant manager, Softlogic Stockbrokers Ltd.

The Colombo stock index ended 0.18% firmer at 6,456.32, snapping six straight sessions of declines.

“Market is hovering near its psychological barrier of 6,450 level.”

The day’s turnover stood at Rs. 325.4 million ($ 2.06 million), its lowest since 19 April, and well below this year’s daily average of Rs. 1.02 billion.

Foreign investors net bought 6.3 million rupees worth of equities on Tuesday, but they have been net sellers of Rs. 662.3 million worth of equities so far this year.

Shares in Ceylon Cold Stores Plc ended 1.5% higher, while Lanka ORIX Leasing Co Plc closed 2.5% firmer and Commercial Bank of Ceylon Plc ended 0.3% up.

The market shrugged off the Central Bank’s policy decision on Friday as it was widely expected, brokers said. The Central Bank kept its key policy rates steady, a little more than a month after it unexpectedly cut the main lending rate, forecasting a modest recovery in the economy this year after growth slumped to a 16-year low in 2017.

Analysts said the depreciation of rupee also weighed on investor sentiment as it is likely to hit profits of some listed firms that rely heavily on imports. The rupee hit a fresh low of 158.00 per US dollar on Monday on importer demand for the US currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected also weighed on sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.