ECONOMYNEXT – Sri Lanka shares gained over 1-percent on Thursday on positive sentiments on IMF.
“ASPI extended the positive sentiment for the third consecutive day after the president’s comments at the parliament on the progression of the debt restructuring talks with India and China, and optimistic view that the IMF board level agreement may be signed in 1Q2023,” First Capital Market Research said in a daily note.
“Accordingly, active investor participation was witnessed on Banking sector counters and index heavyweights. After yields recording a steep decline during the yesterday’s auction, Treasury counters commenced the day on a bullish trend.”
The main All Share Price Index (ASPI) closed at 1.18 percent or 98.65 points higher at 8,484.92.
President Wickremesinghe told parliament on Tuesday that talks with creditors India and China are successful.
“Very soon we will have an answer.”
Sri Lanka has raised taxes and tightened spending to bring a wide budget deficit and unsustainable debt under control. Formal assurances that creditors are willing to re-structure debt has to be given.
State Minister for Finance Shehan Semasinghe said Sri Lanka is expecting to get executive board approval for an International Monetary Fund program by March.
The most liquid index S&P SL20 closed higher at 1.09 percent or 28.39 points at 2,635.77.
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 1.8 billion rupees, equalizing with this month’s average daily turnover.
However, it is also comparatively much lower than 2022’s daily average turnover of 2.9 billion rupees.
The market saw a net foreign inflow of 69 million rupees. The net foreign inflow for the first two weeks of January was 200 million rupees. The total foreign inflow of 2022 was 31 billion rupees.
Hayleys pushed the index up to close at 9.8 percent higher at 70.6 rupees.
Sampath Bank gained 2.9 percent to close at 38 rupees and Royal Ceramics Lanka closed 6.3 percent higher at 28.7 rupees a share. (Colombo/Jan19/2023)