Sri lanka News – Sri Lanka stocks closed higher for a third straight session on Thursday (23), led by Expolanka shares and new buying interest in some banking shares, but witnessed the worst foreign outflow in three weeks.
Foreign investors sold a net of 163 million rupees worth of shares on Thursday, its worst since June 2. The market has witnessed a total foreign outflow of more than 1.2 billion rupees so far this year.
The main All Share Price Index (ASPI) closed 0.58 or 43.94 points higher at 7,556.09. It has gained 1.8 percent in the last three sessions.
“The market mainly moved on Expolanka’s cash dividend announcement. However, there was buying interest coming in to the banking sector as those shares have bottomed out a lot,” a market analyst said.
The turnover was 1.1 billion rupees, highest since June 17, but still less than a third of this year’s daily average turnover of 3.53 billion rupees.
Analyst previously said theres a lot of selling pressure in the market because the investors do not see an ideal market at least for the next 9-months due to high interest rates and taxes.
A 10-member IMF team arrived in Sri Lanka and began discussions on policy corrections with Prime Minister Ranil Wickremesinghe on Monday and the talks have been seen as positive for the investor sentiment. However, Sri Lanka must show progress on debt restructuring before IMF lends any money.
Market analysts have said investors were heavily feeling the pinch of economic crisis as the country’s fuel bunkers have dried out the island nation was frantically looking for dollars to purchase fuel.
The public sector and the schools have moved online for two weeks on the government’s advice to reduce transport and save fuel.
Though a new prime minister and a new cabinet have been appointed, analysts see little progress on both the economical and political fronts. The country is struggling to ensure a continuous supply of fuel due to a shortage of US dollars.
The more liquid S&P SL20 index gained 0.9% or 21.63 points to 2,431.44
The market has so far lost 6.7% in June after gaining 6% in May. It lost 23% in April followed by a 14.5% fall in March.
The market has lost 38.1% 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 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.
Expolanka Holdings gained 7.8% to 185.75 rupees a share, a day after it announced a 8 rupees cash dividend.
Browns Investment was up 5% to 8.4 rupees a share, while Hatton National Bank gained 3% to 80 rupees a share. (Colombo/June 23/2022)