Sri lanka News – Sri Lanka stocks gained on Wednesday (31) for the second session on positive sentiments over hopes that the interim budget could help ease the ongoing economic crisis, brokers said.
The main All Share Price Index (ASPI) up 2.32% or 205.92 points to 9,071.32.
The market saw a net foreign inflow was 697 million rupees on Wednesday, the highest since March. The total net foreign flow turned into inflow. The market has seen a net foreign inflow of 549 million rupees so far this year.
The market generated 4.2 billion rupees in turnover, higher than this year’s average daily turnover of 3.11 billion rupees.
“The market gained on positive sentiments as investors welcomed the interim budget that was presented on Tuesday. It didn’t have any deviation from the economic policy that was presented on May 31st and mainly the exclusion of capital gains tax from the budget,” a top analyst said.
“There is speculation of an IMF deal too would go through. So all those factors are moving the market.”
Sri Lanka’s President Ranil Wickremesinghe presented the interim budget of 2022 to the parliament on Tuesday.
He said IMF negotiations are reaching their final stage and discussions on debt restructuring will be held with main countries. The IMF will hold a press conference on Thursday to explain the discussions with the Sri Lankan authorities.
He has proposed to increase the VAT to 15 percent and cut down various state sector expenditures.
In the last few sessions, investors were concerned about the various revenue-based tax hike the government is expected to impose to fulfill for a possible IMF program as well as to get the country out of it’s economic crisis.
Sri Lanka defaulted on its foreign debt on April 12 and deepened an economic collapse into a political crisis. Sri Lanka is facing its worst fuel and economic crisis in its post-independence era. The economy is expected to contract more than 8 percent this year.
The more liquid S&P SL20 index ended 2.31% or 66.22 points up at 2,928.97.
The main index ASPI has gained 17.3 percent in August so far after gaining 5.3 percent in July. It lost 9.3 percent in June, 23 percent in April, and 14.5 percent in March.
The index has lost 25.8 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Aitken Spence pushed the index up, closing 14 percent higher at 148.7 rupees a share.
Melstacorp closed 11.8 percent up at 53.8 rupees a share, and Hayleys gained 7.2 percent to 105 rupees. (Colombo/Aug31/2022)