By Hiran H.Senewiratne
CSE trading activities yesterday started on a bullish note but subsequently showed some selling pressure due to Standard and Poors’, a rating agency, cutting the outlook of Sri Lanka’s CCC+ rating to negative as foreign reserves fell below two months’ imports, market analysts said. However, although both CSE indices slid, turnover was healthy.
“We revised our outlook on Sri Lanka to negative to reflect our views that the government may face an increasingly challenging financing environment over the next 12 months, S&P sources said in its report.
“The negative outlook reflects our expectation that Sri Lanka’s financing environment may get more difficult over the next 12 months. This would affect Sri Lanka’s ability to service its debt. The country’s external position remains a key vulnerability on the rating, S&P sources said.
The rating agency said reserves had fallen below 3 billion US dollars or less than two months of import cover.
All Share Price Index went down by 63.07 points and S and P SL20 declined by 42.16 points. Turnover stood at Rs. 12.85 billion with three crossings. Those crossings were reported in JKH, where 1,000,000 shares crossed to the tune of Rs. 135 million, its shares traded at Rs. 130.50, LB Finance 1,000,000 shares crossed for Rs. 63 million, its shares traded at Rs. 63 and Sanasa Development Bank 725,000 shares crossed for Rs 36.6 million, and its shares traded at Rs. 50.50.
In the retail market, five companies that mainly contributed to the turnover were, Browns Investments Rs. 4.79 billion (446 million shares traded), Expolanka Holdings Rs. 1.8 billion (12.6 million shares traded), Dipped Products Rs. 1.28 billion (18.4 million shares traded), LOLC Holdings Rs. 1.15 billion (1.8 million shares traded) and Hayleys PLC Rs. 584 million (5.2 million shares traded). During the day 650 million share volumes changed hands in 6600 transactions.
Sri Lanka’s Expolanka Holdings said it had bought a 100 percent stake in US-based IDEA Logistics LLC, through two overseas units for US $ 97 million.
“EFL Global Logistics (Pte.) Ltd (Singapore) and EFL Global LLC (USA), fully owned subsidiaries of Expolanka Holdings PLC, have acquired 100 percent equity interest in IDEA Logistics LLC and its Group of Companies on the 10th August 2021 for a total purchase consideration of US $ 9.7 million, the firm said in a stock exchange filing.
IDEA Logistics LLC is a Central American logistics company headquartered in the United States, servicing a range of US customers, offering freight forwarding, warehousing and trucking services.
Further, LOLC Holdings PLC, with its robust Micro, Small and Medium Enterprises-based (MSMEs) business model said it is expanding the global footprint with three parallel investments in Tajikistan in Central Asia as well as Malawi and Tanzania in East Africa.
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