Sri lanka News – Sri Lanka stocks shot up on Thursday (15) crossing the 10,000-point psychological benchmark to hit 5-1/2 month high pushed by John Keells and banking shares with strong foreign inflows, brokers said.
The main All Share Price Index (ASPI) gained 1.6% or 158.26 points to 10,072.38, its highest since March 28.
The bourse saw a net foreign inflow of 792 million rupees on Thursday. The net foreign inflow so far this year is 5.76 billion rupees after 7.15 billion rupees of net offshore buying in the last 23 consecutive sessions amid positive sentiment over an IMF deal.
“Today the market was extremely positive mainly pushed up by John Keells Holdings following the government’s gazette on issuing casino licenses,” a market analyst said.
“Secondly, we saw banking shares rally on speculation that local debt would not be re-structured while hotels continued to move up on the speculation that Sri Lanka will see a good tourism season.”
President Ranil Wickremesinghe has published rules to regularise gaming under a 2010 law, issuing licenses for up to 20 years, according to two gazette notices.
The market saw a turnover of 5.3 billion rupees, the highest turnover in the last 7-sessions. Today’s turnover is also higher than this year’s average turnover of 3.21 billion rupees.
The IMF early this month announced that it reached a staff-level agreement with Sri Lanka with a possible 48-month 2.9 billion dollars in Extended Fund Facility (EFF) once the debt restructuring is done.
Sri Lanka also submitted a reform-oriented interim budget for 2022 on August 30 which was seen as market positive.
The budget is aimed at almost doubling the tax-to-GDP ratio to 15 percent by 2025 from 8.2 percent at the end of 2021.
Sri Lanka is in the process of coming out of the sovereign debt default declared on April 12 which deepened its economic crisis and turned into a political crisis. The island nation 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 2.28% or 72.44 points up at 3,252.23.
The main index ASPI has gained 11.0 percent in September so far after gaining 17.3 percent in August.
The index has lost 17.6 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.
John Keells pushed the index up, closing 8.6 percent higher at 151 rupees a share.
Sampath Bank closed 11.8 percent up at 40.7 rupees and Commercial Bank ended 4.5 percent up at 58.5 rupees a share. (Colombo/Sept15/2022)