ECONOMYNEXT – Sri Lanka stocks down for the second consecutive session on Thursday (02) dragged down by shares like Commercial Leasing and Finance and LOLC Finance in thin trade, brokers said.
“Both the days the market gained in the first half of the trading day but slipped due to CLC and LOFC These are index heavy stocks, so they are dragging the whole index with it,” a top market analyst said.
“The two stocks have been stagnating for a while when the other retail shares have been moving up.
Although these two stocks came down, some stocks remained steady,” he said.
“But the overall picture is that these shares are on their way down. There could be a huge decline going forward,”
Some analysts said the market is still uncertain about how is the government going to manage the looming debt and current foreign exchange crisis.
Central Bank Governor Ajith Nivard Cabraal last week said the IMF could ask the country to depreciate the rupee under its reform agenda if Sri Lanka goes to the global lender.
All Share Price Index fell 1.38 percent or 157.58 points lower at 11,252.30.
The S & P SL20 index of the most liquid share rose 0.27 per cent or 10.68 points to close at 3,916.33.
“Going forward if it further starts coming down, we think this could affect the whole market sentiment
because there are a lot of people stuck in those two shares at higher prices. So, with these two coming down, the move could affect the retail driven shares like Expolanka, LOLC”, the analyst warned.
“If those start falling then it could lead to an overall correction.”
Foreign investors bought a net 150 million rupees worth of shares on Thursday, but the market has suffered a net foreign outflow of 49.4 billion rupees so far this year.
Sri Lanka’s President over the weekend said he will have to take a lot of unpopular decisions, which
investors speculate could be a rupee depreciation.
A currency depreciation will help companies with export business to earn more profit in local currency.
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With the new Omicron variant being identified and the fear of other businesses getting affected, more
investors seemed to move for the health sector and export-oriented stocks, stockbrokers said.
The day’s turnover was 6.4 billion rupees above this year’s average daily turnover of 4 billion rupees.
Commercial Leasing and Finance Plc nosedived 17.77 percent to close at 50.80 rupees a share and LOLC Development Finance fell 4.92 percent to close at 439.75 rupees a share.
LOLC Finance closed 3.02 percent down at 25.50 rupees a share.
Expolanka, the market heavyweight which has a significant component of export and freight business, slipped 0.35 percent to close at 283.50 rupees a share. (Colombo/Dec2/2021)