ECONOMYNEXT – Sri Lanka shares closed at a two-week high and the market generated the highest turnover over six-weeks on Monday on speculation interest rates fall in line with the inflation and Expolanka’s expansion plans, brokers said.
The market witnessed a turnover of 2.4 billion rupees, slighty less than this year’s daily average turnover of 2.9 billion rupees. This is the highest turnover generated since October 13.
“Bourse commenced the week on a positive note and continued to see strength for the second consecutive day as investors speculate interest rates to continue to fall in line with inflation in the upcoming months,” First Capital Market Research said in it’s daily note.
“Moreover, bullish sentiment continued on EXPO since last week following the announcement of a possible acquisition of logistic companies.”
Central bank governor said the market rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.
The main All Share Price Index (ASPI) closed 1.99 percent or 161.88 points higher at 8,309.94, highest index gain in since November 14.
Previously analysts said the market is moving in a bull-trap with short-lived buying and selling sentiments because investors are not confident in market sustainability.
In the past sessions, the index continued to fall on the speculation of a local debt restructuring although no proper decision has been taken so far.
State Minister for Finance Shehan Semasinghe told parliament during the budget debate on Wednesday that Sri Lanka will continue to pay its domestic loans and no local debt restructuring has been discussed.
The budget saw policies that will increase the cost of doing business across the board, but relieve the government from depending on excess money printing, analysts say.
The market saw a foreign outflow of 146,403 rupees, bucking an inflow trend in the last eight straight sessions.
The total net foreign inflow stood at 18.29 billion rupees so far for this year.
The more liquid index S&P SL20 closed 2.94 percent or 74.58 points higher at 2,612.76.
The ASPI has fallen 3.3 percent so far in November after losing 13.4 percent in October.
It has lost 32 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.
Expolanka pushed the index up to close at 11.6 percent to 182.3 rupees.
Other top gainers were Browns Investment gained 19.6 percent to close at 6.10 rupees and LOLC gained 8.2 percent to close at 368.3 rupees.(Colombo/Nov28/2022)