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Saturday October 1st, 2022

Sri Lanka shares bucks winning streak on profit taking after gaining 20%

ECONOMYNEXT – Sri Lanka stocks slipped on Tuesday (16) for the first time in 13 straight session after the main index gained nearly 20% in the rally on political stability hopes with profit taking flowed into the market while investors moved to energy and plantation shares, dealers said.

The main All Share Price Index (ASPI) lost 1.15% or 105.28 points to 9,086.24, falling from its highest close since March 30. The index had risen 19.6% in the 12 straight sessions through Monday (15).

“In the last 12 sessions, the index rose close to 2000 points. Therefore, we saw profit taking in the main counters while we see investors shifting to energy and plantation sector counters,” a market analyst said.

“The market was overall highly volatiles as there was buying interest in the new counters (energy sector and plantations) while selling was centered mainly on Expolanka, LOLC, Browns, Browns Investment, LOFC.”

The political stability after four months of protest is seen as the catalyst for the market gain, dealers said.

The market generated 5.4 billion rupees in turnover, nearly twice of this year’s average daily turnover of 3.13 billion rupees.

Sri Lanka already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to a change in the president, cabinet, and government.

The more liquid S&P SL20 index moved dipped, closing at 1.93% or 59.71 points weaker at 3,037.59.

Sri Lanka is facing its worst fuel and economic crisis in its post-independence era and the economy is expected to contract 7 percent this year.

The main ASPI gained 17.5 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 market index has lost 25.6 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.

Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.

Net foreign inflow was 136 million rupees on Monday, but the total net foreign outflow so far this year is 1.2 billion rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Hayleys dragged the index down, closing 4.8 percent weaker at 108.7 rupees a share.

Commercial Bank closed 3.8 percent down at 53.7 rupees a share, and Expolanka slipped 2.3 percent to 219.7 rupees. (Colombo/Aug16/2022)

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  1. sacre blieu says:

    At the time we became the world’s best-performing stock market, which was riddled with fraud, corruption to the core with sound professional best practices thrown down the drain and where honour was rendered rotten in favour of greed. No justice was been encouraged for those who were bankrupted and robbed. There was blood on the floor and human sacrifices. That necklaces of putrefaction would remain hung around the necks of those responsible.

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Comments (1)

Your email address will not be published.

  1. sacre blieu says:

    At the time we became the world’s best-performing stock market, which was riddled with fraud, corruption to the core with sound professional best practices thrown down the drain and where honour was rendered rotten in favour of greed. No justice was been encouraged for those who were bankrupted and robbed. There was blood on the floor and human sacrifices. That necklaces of putrefaction would remain hung around the necks of those responsible.