ECONOMYNEXT – Sri Lanka shares edged down on Thursday on weak macroeconomic sentiments, analyst said.
“Bourse reverted to the red zone on the back of negative sentiment raised among investors on the possible delay in the debt restructuring talks which could postpone the IMF bailout for the country to 2Q2023, as highlighted by Standard Charted Research.,” First Capital Market Research said in it’s daily note.
Analyst said the market has also moved to a wait-and-see approach ahead of the earnings report that is expected next week.
The main All Share Price Index (ASPI) closed at 0.56 percent or 46.82 points lower at 8,334.05.
However, the government has decided to cut down expenditure as the financial crisis was worser than they expected it to be.
Market has been falling since the year started due to the proposed 65 percent electricity tariff hike while the government also hiked various excise duties.
The most liquid index S&P SL20 closed 0.43 percent or 11.03 points lower to 2,549.92.
First quarter of 2023 is expected to be negative with the taxations going in to effect from January 1st and there are talks of a hike in electricity tariffs, which has gained Cabinet approval and is waiting for recommendations by the Public Utilities Commission of Sri Lanka.
Whereas the second quarter was expected to be more positive with the anticipation of IMF getting through and with the interest rates expected to ease as the taxes starts to generate funds.
Sri Lanka is expecting a further contraction in the economy after a negative growth in 2022, Cabinet Spokesperson Bandula Gunawardena said at the Weekly Cabinet Press Briefing.
The market witnessed a turnover of 1.9 billion rupees, lower than this month’s 2.0 billion rupees average daily turnover. It is also comparatively much lower than 2022’s daily average turnover of 2.9 billion rupees.
The market saw a net foreign outflow of 10.5 million rupees. The net foreign inflow for the first seven session of January is 80 million rupees. The total foreign inflow of 2022 was 31 billion rupees.
Lanka IOC pushed the index down to close at 2.3 percent lower at 181 rupees.
Melstacorp fell 2.1 percent to close at 46 rupees and LOLC closed 1.7 percent higher at 371.8 rupees a share. (Colombo/Jan12/2023)