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Tuesday May 17th, 2022
Markets

Sri Lanka stock index hits fresh peak on export firms; foreigners exit over rupee woes

ECONOMYNEXT – Sri Lanka stocks touched a fresh all-time high on Tuesday (30), led by shares of the companies which are expected to post strong earnings due to exports even if the rupee currency depreciates, brokers said.

All Share Price Index gained 2.13 percent or 238.44 points higher at 11,440.53, a fresh record closing high.

Both Expolanka and LOLC Holdings accounted for more than 80 percent of the ASPI’s gain.

“We saw Western markets recovering after the initial sell off post the Omicron fears. Similarly, Colombo too followed the same momentum. There is nothing to bring the market down,” a Colombo based analyst said.

Some stockbrokers, however, said speculation over steep depreciation of the rupee has raised some concerns among foreign investors, who on Tuesday sold a net 414 million rupees worth of shares, extending the net foreign inflow to 49.5 billion rupees so far this year.

Sri Lanka’s President said over the weekend he will have to take a lot of unpopular decisions, which investors speculate could be a rupee depreciation.

A currency depreciation will help companies with export business to earn more profit in local currency.

With the new Omicron variant being identified and the fear of other businesses getting affected, more investors seemed to move for the health sector and export-oriented stocks, stockbrokers said.

The S&P SL20 index of the most liquid share rose 1.84 per cent or 70.37 points to close at 3,900.02.

Analysts have cautioned about signs of market peaking off because of heavy speculative trading amid expert investors are moving aside while newcomers are driving the herd mentality with speculators are cashing out or moving into more fundamentally strong counters.

The day’s turnover was 10 billion rupees above this year’s average daily turnover of 4 billion rupees.

The gain was led by Expolanka, LOLC Holdings and Commercial Leasing and Finance Plc.

Expolanka, the market heavyweight which has a significant component of export and freight business, gained 6.83 percent to close at 283.00 rupees a share.

LOLC Holdings closed 8.35 percent up at 983 rupees a share while Commercial Leasing and Finance Plc up 3.23 percent to close at 67.10 rupees a share. (Colombo/Nov30/2021)

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