ECONOMYNEXT – Shares in Sri Lanka rose for the sixth straight session on Thursday (04) to their highest level in more than two months, as turnover recorded its highest level in more than four months, interest from buyers for the market continuing following President Ranil Wickremesinghe’s policy statement.
Turnover was 3.79 billion rupees, its highest since March 25 and more than this year’s average daily turnover of 3.03 billion rupees.
The main All Share Price Index (ASPI) rose 1.84% or 149.00 points to 8,229.14, its highest since May 30.
“We are seeing buyer interest continuing in the market and new investors also reactivating. This is common in the equity market when there is political stability,” a market analyst said.
“Lead flows through the power and energy sector and the plantation sector.”
Wickremesinghe, in his policy statement to parliament, revealed plans for a 4-year IMF lending program, debt restructuring, tax reforms and management of loss-making public enterprises.
He also said that the country is in the final stages of the debt restructuring plan which will be presented to the IMF and negotiations will begin soon with creditors.
The more liquid S&P SL20 index rose, closing 3.54% or 91.62 points higher at 2,677.67.
Sri Lanka is facing its worst energy and economic crisis in its post-independence era and the economy is expected to shrink by 7% this year.
The main ASPI has gained 6.4% in August so far after gaining 5.3% in July. It lost 9.3% in June, 23% in April and 14.5% in March.
The market has lost 32.7% so far this year after being one of the best stock markets in the world with a return of 80% last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led to the country being rated with a restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
Investors are also concerned about the rupee’s sharp fall from 203 to 370 levels so far in 2022.
LOLC, which pushed the ASPI, closed up 14.4% at 476.3 rupees per share, Expolanka closed up 8.8% at 208 rupees per share, while Royal Ceramics gained 9, 7% to 32.1 rupees. (Colombo/August 04/2022)