Sri lanka News – Sri Lanka stocks recovered from more than three-month low on Wednesday as conglomerate John Keells Holdings helped to push the index after the company’s joint venture with India’s Adani Group boost the share buying, brokers said.
The main All Share Price Index (ASPI) closed 0.31 percent or 25.73 points steady at 8,293.50, recovering from its lowest closes since August 04 and gaining for the first time in the last five straight sessions.
“Market came off on very thin volumes and in the early part of the trade the market turnover was only around 200 million while the market was 40-points negative then buying came in and moved the market up,” a market analyst said.
The market has been on a falling trend as investors awaited for cues on policies from the 2023 budget which is scheduled to be presented next week amid panic selling time to time.
The market saw a turnover of 831 million rupees, lower than this year’s average turnover of 3.0 billion rupees.
Analysts say the market will remain bearish until the budget for 2023 is presented on November 14, but expect to see a bullish sentiment in January.
Investors are also concerned over the impact of local debt restructuring on risky assets, analysts have said as the market is waiting for a debt restructuring decision between the government and its creditors ahead of an IMF loan approval.
The market is taking a wait-and-see approach after the tax proposals were published. The corporate tax rates are expected to be increased to 30 percent.
The market saw net foreign inflows of 59.8 million rupees. The total net foreign inflow so far for this year is 18.8 billion rupees.
The more liquid index S&P SL20 closed 0.90 percent or 22.75 points higher at 2,541.58.
The ASPI has fallen 3.5 percent in so far in November after losing 13.4 percent in October. It has lost 32.1 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.
The listed companies have shown reasonable profits in their third quarter of the year, however, analysts say the disposable income of the general public due to proposed tax hikes is the main reason for the negative expectations over the December earnings.
John Keells Holdings, contributing to the most index’s gain, ended 2.3 percent higher at 135.5 rupees a share.
“We see foreign buying in JKH in the past couple of days. However, in general, it had a lot of foreign selling. So we think investors are betting on an overall recovery in the next year with good forecast on tourism,” the analyst said.
Meanwhile, another analyst said JKH moved up following the news on the start of construction work of its joint venture with India’s Adani Group to develop the West Container Terminal (WCT) in Colombo port.
Tokyo Cement gained 20.8 percent to 34.2 rupees higher and analyst attributed the rise for a better than expected quarterly results. Cargills closed 5.9 percent firmer at 212.0 rupees a share. (Colombo/Nov09/2022)
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