On Friday (04) Sri Lanka’s central bank raised the key monetary policy interest rates by 100 basis points to more than a two-year high in a bid to reduce pressure on the currency that was created by excess money printing while keeping the interest rates at a low level to spur pandemic-hit economic growth.
In March, the market has already lost 12.2 percent after falling 11 percent in the previous month.
Overall the market has lost 16.9 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year.
S&P SL20 of the most liquid stocks is also down 4.25 percent or 152.58 points to 3,434.35 points.
The market turnover was 2.5 billion rupees, around half of this year’s average turnover of 5.9 billion rupees.
Foreign investors, who had been worried about possible sharp depreciation or devaluation in the currency, bucked the trend to buy 67.6 million rupee worth shares. The foreign sales so far this year have been 2.7 billion rupees.
In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.
Analysts predict, the downward trend to continue until investors see some strong and sustainable steps to address the economic and foreign debt crisis.
LOLC Holdings, Expolanka, and Commercial Bank dragged the main index on Wednesday.
LOLC Holdings slipped 8.9 percent to close at 795.75 rupees a share, while Expolanka Holdings, the market heavyweight lost 7.1 percent to close at 240.25 rupees a share, market data showed.
Commercial Bank of Sri Lanka closed 2.3 percent down at 77.50 rupees a share. (Colombo/March09/2022)