Sri Lanka’s stocks up but turnover slumps to over 2-mth low; political woes weigh | Sinhala News

Sri lanka News – Sri Lanka stocks edged up on Friday (08), rising for the first time in five sessions by market heavyweight Expolanka with strong export businesses ahead of June quarter earning, brokers said.

The main All Share Price Index (ASPI) closed 0.32% or 22.83 points up at 7,080.69, rising from its lowest close from April 26.

“Though market gained today, still the outlook is negative due to rate hike and political risks,” a market analyst said.  

On July 07, the central bank raised interest rate at which overnight money is printed for banks by 100 basis points to 15.5 percent, its highest since September 2001 as the country was gripped by galloping inflation and depreciation. On Wednesday, the yields in T-bills rose by over 400 basis points.

A looming political crisis with anti-government forces have called for a nation wide protest on Saturday (09) to oust President Gotabaya Rajapaksa and Prime Minister Wickremesinghe also has become a concern for investors.

The government has also declared that it can only provide fuel for essential services including health until July 10 and all non-essential services to work online as the country has run out of fuel.

Many public offices and all schools were closed this week due to a government decision to save fuel.

Sri Lanka is facing the worst fuel crisis in its post-independent era.

The more liquid S&P SL20 index gained 0.71% or 15.84  points to 2,244.83.

The turnover was 385 million rupees, the lowest since April 25 and less than an eighth of this year’s daily average turnover of 3.32 billion rupees.

The main ASPI has lost 3.78% 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 42.1% 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.

Foreigners sold a net of 15 million rupees. The total foreign outflow so far this year is 932 million rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Expolanka gained 2% to 163.0 rupees a share.

LOLC Holdings rose 2.7% to 364.2 rupees a share, while Seylan Bank closed 7.7% stronger at 28.0 rupees a share. (Colombo/July 08/2022)

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