The stock market suffered a Rs 429.8 million net foreign outflow (NFO) due to the current uncertain political situation, taking NFOs in the past six weeks to date to
Rs 4.2 billion. The government securities market was no better, suffering a NFO of Rs 6.9 billion in the week ended Wednesday (1 July), taking NFOs from this market in the past 11 weeks to date to Rs 39.7 billion. Markets in the two review periods to date have suffered a NFO of Rs 43.9 billion. Such exits also cause downward pressure on the rupee, currently controlled at Rs 133.60 to the US dollar in interbank spot trading by the Central Bank (CB). Friday's outflows in the stock market were caused by Textured Jersey (Rs 441.2 million NFO), which contributed Rs 1.8 billion of Friday's overall total stock market turnover of Rs 2.46 billion, in mainly 'foreign to foreign' transactions, where the seller was Pacific Dunlop, a Hong Kong listed Chinese company, which divested 10% of its shares on Friday, thereby bringing down its investments in Textured to 30%.
Textured's Director HasithaPremaratne told Ceylon FT that this divestment was to help Pacific to move in to investments to Vietnam. "The buyers were mainly foreign funds and some locals," Premaratne said. Textured is a fabric manufacturer, where one of its key partners is Brandix, one of two of Sri Lanka's top garment exporters catering to high end brands.
Other than this sale which uplifted turnover, the market is dead, sources told Ceylon FT. Of Friday's total 96.73 million share volume (SV), Textured's contribution was a massive 70.58 million.
Meanwhile, this sale once more saw buying interest in the bourse returning, as a result of which the benchmark ASPI increased by 0.35% to 7,007.05 points and the more sensitive S&P SL 20 Index by 0.54% to 3,914.98 points, though Textured per se saw its share price decline by 1.43% to Rs 27.50 a share at Friday's trading.
Apart from Textured, two other stocks entered the Rs 100 million turnover club on Friday. They were People's Merchant Finance (Rs 142.91 million) and Seylan Bank
(Rs 123.67 million) respectively.
Seylan saw 1.24 million of its shares change hands, whilst seeing its share price declining by 0.70% to Rs 100 a share. People's contribution to Fridays' SV was 6.49 million, whilst seeing its share price increasing by 1.87% to Rs 27.30 a share.
Courtesy: Ceylon Financial Today 5 July 2015