Sri Lanka stocks close at fresh over 5-month peak on bank, hotel shares
ECONOMYNEXT – Sri Lanka stocks shot up over 1.5 percent on Wednesday (14) to its highest close in more than five months on solid buying in banking and hotel shares, brokers said.
The main All Share Price Index (ASPI) gained 1.69% or 165.03 points to 9,914.12, its highest since March 28.
“Today investors returned back to the market. We are seeing a pattern of volatile up-trend these days because the things are not clear cut to investors,” a market analyst said.
“We are seeing a bit of profit taking in select counters. But, more than that, there’s a rally in hotel counters in a big way on expectation of a strong tourism season.”
There had been buying in LOLC Holdings too after its subsidiary Browns Investment issued a corporate disclosure announcing that it is ready to negotiate with the government on a tender to procure 4.5 million MT coal for Norochacholai power plant with the China Machinery & Engineering Cooperation (CMEC).
Meanwhile, there were 20 crossings in Expolanka priced at 230 rupees per share.
The market saw a turnover of 4 billion rupees, higher than this year’s average turnover of 3.19 billion rupees.
The bourse saw a net foreign inflow of 673 million rupees on Wednesday. The net foreign inflow so far this year is 4.97 billion rupees after 6.3 billion rupees of net offshore buying in the last 22 consecutive sessions amid positive sentiment over an IMF deal.
The IMF early this month announced that it reached a staff-level agreement with Sri Lanka with a possible 48-month 2.9 billion dollars in Extended Fund Facility (EFF) once the debt restructuring is done.
Sri Lanka also submitted a reform-oriented interim budget for 2022 on August 30 which was seen as market positive.
The budget is aimed at almost doubling the tax-to-GDP ratio to 15 percent by 2025 from 8.2 percent at the end of 2021.
Sri Lanka is in the process of coming out of the sovereign debt default declared on April 12 which deepened its economic crisis and turned into a political crisis. The island nation is facing its worst fuel and economic crisis in its post-independence era. The economy is expected to contract more than 8 percent this year.
The more liquid S&P SL20 index ended 1.49% or 46.64 points up at 3,179.79.
The main index ASPI has gained 9.2 percent in September so far after gaining 17.3 percent in August.
The index has lost 18.9 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Sampath Bank pushed the index up, closing 10.6 percent higher at 36.4 rupees a share.
John Keells Holdings closed 4.5 percent up at 142 rupees and Commercial Bank closed 4.6 percent up at 56 rupees a share. (Colombo/Sept14/2022)
