ECONOMYNEXT – Sri Lanka’s shares closed down on Monday amid concerns over rising protests agains tax hikes, which is also expected to hit corporate earnings in the face of reduced consumption, analysts said.
Earnings of Expolanka Holdings dragged the market down after Sri Lanka based logistics unit of SG Holdings of Japan reported an 87 percent fall in December 2022 quarterly earning.
Investors expected the company to perform better in the December quarter earnings.
The earnings for first quarter are expected to be negative for many corporates with higher taxes and rising costs. However, investors didn’t expect earnings to be this low because of year end pick ups on heavy counters, an analyst said.
Earnings in the second quarter of 2023 are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.
However, the central bank said the IMF deal is likely in the first quarter or in the first month of the second quarter.
The most liquid index S&P SL20 dropped by 1.16 percent or 32.75 points to 2,782.25.
Life insurance counters gained though index heavy fell, analysts said.
The central bank has said it could cut interest rates in future when the the country sees fall in inflation, which has already started decelerating.
The market saw a turnover of 1.6 billion rupees, lower than the month’s daily average of 1.8 billion rupees and nearly half of 2022’s daily average turnover of 2.9 billion rupees.
The bourse saw a net foreign inflow of 96 million rupees, extending the net offshore buying to 319.2 million rupees so far this year.
Top losers of the day were Expolanka, Sampath Bank and LOLC. (Colombo/Jan30/2023)