Sri Lanka stocks fall for 4th straight session to end at over 1-week low; foreigners buy
ECONOMYNEXT – Sri Lanka stocks fell on Wednesday (27) for the fourth session on weak sentiments amid concerns over economic and political crisis, however, the market has seen some buying coming in slowly, brokers said.
However, foreign investors bought the island nation’s risky assets in large volume. They bought a net of 289 million rupees, the highest net foreign buying since March 30. The total foreign outflow so far this year is 696 million rupees.
The main All Share Price Index (ASPI) edged down 0.05% or 3.48 points to 7,626.69.
“We saw some buying coming into the market today mainly because there is a speculation that rates may be eased as we see fuel prices are easing a bit therefore the inflation also coming down a bit,” a broker said.
However the market slipped at close as there are still margin calls happening, he said.
The more liquid S&P SL20 index also fell, closing at 0.40% or 9.60 points lower at 2,409.12.
Sri Lanka is facing its worst fuel and economic crisis in its post-independent era and the economy is expected to contract between 8-10% this year.
The turnover was 1 billion rupees, less than a third of this year’s average daily turnover of 3.07 billion rupees.
The main ASPI has gained 3.8% in July so far after falling 9.3% in June, reversing a 6% gain in May. It lost 23% in April followed by a 14.5% fall in March.
The market has lost 37.6% so far this year after being one of the world’s best stock markets with an 80% return last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Melstacorp, leading the ASPI’s fall, closed 2.4% down at 40 rupees a share.
Senkadagala Finance fell 5.6% to 371.8 rupees a share, while LOLC Holdings closed 1.8% down at 382.25 rupees a share. (Colombo/July 27/2022)
