Stock market sees silver lining in its ‘uncertainty cloud’

Hiran H.Senewiratne

Despite political uncertainty in the country, several large-scale foreign investors are interested in buying some of Sri Lanka’s listed companies which show significant financial promise. This is seen as a very good sign for the performance of the Colombo Stock Exchange (CSE), market analysts said yesterday.

” At present three leading Colombo Stock Exchange (CSE) listed companies have changed current perception in the market as those companies’ shares/stakes have been purchased by three leading foreign investors,” Head of Sales   Softlogic Stock Brokers Eardly Kern told the Island Financial Review.

He said that a foreign company called Lyca Group will invest US $ 60 million or Rs 11 billion to purchase stakes in Swarnamahal Holdings, Softlogic Holdings entered into a private placement deal with Samena Ceylon Holdings Limited, a fully-owned subsidiary of Samena Capital for  Rs 3 billion and Janashakthi General Insurance being bought over by world largest Insurance company Alliance for 16,4 billion.

Kern said that foreign investor appetite for acquiring these listed companies’ shares/stake to control them is a good sign for the capital market to develop despite political uncertainty in the country. “If the country’s political stability settles, there will be more foreign investors to invest in in the future,” Kern said.

Amid those developments the market yesterday showed positive sign of improvement with the easing off the political uncertainty. All Share Price Index moved up by 12.21 points and S and P SL20 18.32 points. The day’s turnover touched Rs 863 million with three crossings. Those crossings were Amana Takaful Life Limited crossed 38.5 million shares to the tune of Rs 50 million and per share value Rs 1.30, Dialog 2.8 million shares crossed for Rs 33.8 million per share value Rs 13.50 and JKH 482,000 shares crossed for Rs 76.6 million per share value Rs 159.

When it comes to retail market companies that mainly contributed to day’s turnover were JKH Rs 165 million (one million shares traded), Dialog Rs 74 million (5.5 million shares traded) and Janashakthi Insurance Rs 56.3 million (1.7 million shares traded)

“The market was a bullish marker boosted by the foreign investor participation due to  the situation appearing to be stable,” stock market analysts said.