ECONOMYNEXT – Sri Lanka’s shares rose on Thursday to its highest close in more than three-and-a-half month as news on Paris Club members willingness for financial assurance boost sentiment, stockbrokers said.
The assurance could help the island nation to obtain $2.9 billion International Monetary Fund (IMF) loan sooner than expected, they said.
All Share Price Index (ASPI) edged up by 0.81 percent or 72.37 points to 9,022.38.
“The current economic environment is pushing the index up, especially the banking counters,” an analyst said.
Financial stocks including banks and insurances have seen some rise due to the latest financial assurance news, the analyst said.
The Paris Club is ready to provide financing assurances to Sri Lanka’s IMF 2.9 billion dollar loan, a foreign media report stated.
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.
Sri Lanka has been witnessing a period of disinflation which is considered to a be a positive macroeconomic factor for investors, the analyst said.
The market saw a turnover of 1.8 billion rupees today, in line with this year’s daily average, but less than 2022 average turnover of 2.9 billion rupees.
The most liquid index S&P SL20 edged up by 0.47 percent or 13.22 points to 2,812.75.
The earnings for first quarter are expected to be negative for many corporates with higher taxes and rising costs. However, investors had not expected earnings to be low in the December quarter because of year end pick ups on heavy counters, the 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.
The central bank said the IMF deal is likely in the first quarter or in the first month of the second quarter.
The bourse saw a net foreign inflow (NFI) of 47 million rupees extending the net offshore buying to 660 million rupees so far this year.
Top gainers of the day were John Keells Holdings, Commercial Bank and Sampath Bank. (Colombo/Jan02/2023)