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Saturday March 2nd, 2024

Sri Lanka shares down from over 5-month high amid profit taking

Stock market information

ECONOMYNEXT – Sri Lanka stocks slipped on Tuesday (13) for the first time in the five sessions on retail selling amid profit taking with some shares which had risen in the past few sessions, brokers said.

The main All Share Price Index (ASPI) fell 0.65% or 64.09 points to 9,749.09, falling from highest since March 28 hit on the previous session.

“After gaining continuously in the last few session, we saw selling coming into the counters that mostly moved the market,” a market analyst said.

“We are seeing this short-turn around trend in the market as there is an underlying selling pressure. As much as the market moves up, there is also a selling pressure that comes in.”

The market saw a turnover of 3.7 billion rupees, slightly higher than this year’s average turnover of 3.19 billion rupees.

The bourse saw a net foreign inflow of 108 million rupees on Tuesday. The net foreign inflow so far this year is 4.29 billion rupees after 5.6 billion rupees of net offshore buying in the last 21 consecutive sessions amid positive sentiment over an IMF deal.

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 0.74% or 23.49 points up at 3,133.15.

The main index ASPI has gained 7.4 percent in September so far after gaining 17.3 percent in August.

The index has lost 21.5 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.

Ceylinco Insurance pushed the index down, closing 4.4 percent lower at 2,034 rupees a share.

Royal Ceramics closed 5.8 percent down at 39.3 rupees and LOLC Holdings closed 3.4 percent up at 545.5 rupees a share. (Colombo/Sept13/2022)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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