Sri Lanka stocks hit record high: CLC drags down after Dubai comment

ECONOMYNEXT – Sri Lanka stock index touched a fresh all-time peak on Monday (08) in strong turnover on better than expected earnings but edged down as it was dragged down by market heavyweight Commercial Leasing and Finance (CLC) after comments made by a top Colombo Stock Exchange (CSE) official in Dubai, brokers said.

“It was in response to a question on CLC asked by a local investor who had attended the forum, a top CSE official said that companies without adequate free float could be penalised according to a new Securities and Exchange Commission (SEC) Act,” a capital market source who attended the Dubai investor forum told EconomyNext.

Another source who attended the Dubai investor forum confirmed it.

Rajeeva Bandaranaike, CEO, Colombo Stock Exchange (CSE), was not immediately available for comments on this.

Shares in CLC, which brokers said does not have adequate freefloat, nosedived 14.8 percent to 71 rupees. On Friday the company responding to a bourse query on an unusual price surge earlier had said “In terms of Sec 8.4 (a) we wish to confirm that there is no undisclosed price sensitive information with the company in relation to Commercial Leasing and Finance PLC.”

The Colombo benchmark All Share Price Index (ASPI) touched a fresh all time high of 10,703.92 points in the early trade, but closed at 0.10 percent or 10.81 points down at 10,621.40.

“After witnessing heavy volatility triggered by CLC in the first half of the session, the ASPI stabilized oscillating between marginal gains and losses and eventually edged lower” a broker said.

Brokers said the ASPI commenced the session reaching an intra-day low of 10,323.84 and within a few minutes surpassed the 10,700 level to scale a fresh record high at 10,704. Subsequently, the index consolidated and moved within the range 10,600-10,640 for the rest of the session.

Brokers said the losses in CLC were compensated by LOLC Finance, which gained 69.92 percent to close at 21.50 rupees.

The LOLC in a disclosure to the bourse responding to a bourse query on an unusual price surge said on Monday: “In terms of Sec 8.4 (a) we wish to confirm that there is no undisclosed price sensitive information with the Company in relation to LOLC Finance PLC.”

The S&P SL20 index of more liquid stocks, however, gained 0.41 percent or 14.74 points to close at 3,659.94.

The more liquid S&P SL 20 index snapped a four-session downward trend supported by price gains in Expolanka Holdings, LOLC Holdings, and Tokyo Cement Company.

The day’s turnover was 8.2 billion rupees, more than double of this year’s average daily turnover of over 4 billion rupees.

“Turnover reached a two-month high at 8,266 million rupees boosted by LOLC Finance and Expolanka which accounted for 50 percent of total turnover” brokers said.

Foreign investors, however, sold a net of 38.2 million rupees’ worth of shares, extending the net foreign inflow to 46.2 billion rupees so far this year. Brokers had expected foreign investors to exit after Moody’s Investor Service downgraded Sri Lanka’s sovereign credit rating last week to near default category.

Expolanka Holdings gained 4.41 percent to close at 207.50 rupees and Browns Investments, another subsidiary of LOLC Holdings gained 4.63 percent to close at 11.50 rupees a share.

The bourse saw 75 stocks gaining against 120 falling on Monday.(Colombo/Nov 08/2021)

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