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Monday November 29th, 2021
Stocks & Companies

Sri Lanka share index clocks new record high for third straight session

ECONOMYNEXT – Sri Lanka’s main stock index hit a fresh all time high on Thursday (02) with a 1.92 percent gain on a strong turnover as some investors used available margin credit, brokers said.

Brokers said investors were coming strongly into the market with the beginning of a new month has given them some leverage to borrow through margin credit, which should be settled by the

The index continued to increase despite analyst’s expectations of a possible correction in the equity market due to the central bank’s 2 percent hike of Statutory Reserve Ratio (SRR) of commercial banks that comes to effect from Wednesday (Sept 01).

“The central bank’s tightening has yet to impact the market,” said a broker.

The index continued to increase throughout the day and reached its intraday record high of 9,353.06 during the trading before falling to end at an all-time high close of 9,339.35 with 176.22 points gain for the day.

The S& P SL20 index of more liquid stocks gained 2.13 percent or 73.02 points to close at 3,501.74.

An inflow from IMF’s SDR, a Chinese funding, and Bangladesh Central Bank currency swap have helped boost investor sentiment.

Brokers said speculation of the country, which is facing some tough economic challenges including external debt repayment, seeking an IMF debt restructuring could also boost the sentiment.

However, Sri Lanka Co- cabinet spokesman Ramesh Pathirana on Tuesday told reporters that the government have not taken any decision yet to seek the International Monetary Fund but will consider based on future conditions.

Meanwhile, analysts still expect a market correction soon when the central bank’s tightening measures start to bite. The central bank raised its key policy rates by 50 basis points last week.

It also has raised commercial banks’ Statutory Reserve Ratio (SRR) by 2 percent with effect from September 1,2021.

The day’s turnover was 12.03 billion rupees, nearly three times of this year’s average daily turnover of 3.9 billion rupees.

The gain was led by LOLC Holdings, Commercial Leasing and Finance and Vallibel One Plc.

LOLC Holdings, the second market heavyweight worth 298.9 billion rupees, closed 3.11 percent up at 629 rupees a share.

Commercial Leasing and Finance, which was traded in thin volume, gained 6.85 percent to close at 23.40 rupees and Dhammika Perera’s Vallible One Plc gained 11.15 percent to close at 69.80 rupees a share.

Expolanka Holsings which have the highest market capitalization worth 359.7 billion rupees of the total market capitalization gained 1.94 percent to close at 184 rupees.

Foreign investors, sold a net 856.6 million worth of shares on Wednesday, and the market has suffered a net foreign outflow of over 38.8 billion rupees so far this year.

The bourse saw 137 stocks gaining against 54 falling on Thursday. (Colombo/September 02/2021)

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