Sri lanka News – Sri Lanka stocks gained for the fourth consecutive session on Tuesday (02) to close at two month high on hopes that an IMF deal would be signed by the end of August and the country would see some economic stability, dealers showed.
The turnover was 2.4 billion rupees, its highest since May 23 and more than two-third of of this year’s average daily turnover of 3.03 billion rupees.
The main All Share Price Index (ASPI) rose 1.79% or 138.95 points to 7,907.52 from its lowest since July 3.
“We are seeing positivity coming into the market in the new month as we get closer towards a possible IMF program,” a market analyst said.
“Yesterday’s price revision is also working well with Lanka IOC being a driver in the market’s gain. There is some progress in some economic reforms while we are seeing good earning in dollar (earning) companies.”
Lack of fuel in state-run Ceylon Petroleum Corporation means the Lanka IOC, a subsidiary of Indian Oil Corporation (IOC), has increased its sales volume and that can lead to higher profits, analysts said.
The more liquid S&P SL20 index moved up, closing at 2.32% or 56.71 points lower at 2,501.80.
Sri Lanka is facing its worst fuel and economic crisis in its post-independent era and the economy is expected to contract between 8-10% this year.
The main ASPI gained 2.3 percent in August so far after gaining 5.3% in July. It lost 9.3% in June, 23% in April, and 14.5% in March.
The market has lost 35.3% 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.
Net foreign sales was 16 million rupees while the total net foreign outflow so far is 382 million rupees.
Sri Lanka’s sovereign debt default on April 12 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.
Lanka IOC which pushed the ASPI’s gain, closed 11.7% up at 99.7 rupees a share, Expolanka closed 4% up at 174.8 rupees a share, while Hayleys closed 4.9% up at 82.20 rupees. (Colombo/Aug 2/2022)