ECONOMYNEXT – Sri Lanka’s share index rose 1.56 percent on Friday (26) to hit a fresh record high, continuing the market momentum after the central bank’s decision to keep the key policy rates steady, brokers said.
However, analysts said concerns over Sri Lanka’s ability to purchase fuel with low foreign currency could become a risk in the near future.
“Manufacturing sector helped to boost the index with expectations over import restrictions helping the companies have more business locally. Tiles, ceramic, and food manufacturing companies gained,” said a Colombo-based stockbroker.
“But some investors have got nervous because of a rumour that the country could run out of fuel in January as we do not have many dollars to pay.”
Sri Lanka which is totally dependent on fuel from imports has been in discussion with India for 500 million US dollars and Oman for 3.6 billion US dollar fuel credits. But nothing has been finalised yet.
All Share Price Index gained 171.95 points to close at 11,197.68, its record closing high.
Brokers said the market surged more than 100 points within the first five minutes and remained positive throughout the day.
The S&P SL20 index of the most liquid share rose 1.47 per cent or 55.20 points to close at 3,822.61.
Foreign investors, however, sold a net of 277.8 million rupees worth of shares, extending the net foreign inflow to 49.0 billion rupees so far this year.
Analysts have cautioned about signs of market peaking off because of heavy speculative trading amid expert investors are moving aside while newcomers are driving the herd mentality with speculators are cashing out or moving into more fundamentally strong counters.
The day’s turnover was 9.1 billion rupees above this year’s average daily turnover of 4 billion rupees.
Brokers said 48 percent of the contribution came from the Food, Beverage & Tobacco sector and the Capital Goods sector.
The gain was led by Expolanka, LOLC Finance and LOLC Holdings.
Expolana, the market heavyweight gained 5.10 percent to close at 247.25 rupees a share. LOLC Finance closed 9.35 percent up at 26.90 rupees a share while LOLC Holdings up 2.46 percent to close at 928.25 rupees a share.