ECONOMYNEXT – Sri Lanka stocks continued to gain for the ninth consecutive time on Thursday ending its highest in more than seven weeks, brokers said.
The market breached the 9000 psychological mark during the first hour into trade.
“With the President talking about interest rates coming down which drove some positive sentiments in the morning. With ASPI crossing the 9,000 mark, investors were looking to take some profit and there was some aggressive profit taking,” an analyst said.
“The momentum of the market was slowed down with SJ Holdings was not buying back shares from Expolanka and that drove concerns among the investors and led to the market coming down.”
The main All Share Price Index (ASPI) closed 0.12 percent or 10.40 points higher at 8,891.74, its highest since October 17.
The market witnessed a turnover of 2.4 billion rupees, lower than this year’s daily average turnover of 3 billion rupees.
The market saw a net foreign inflow of 130 million rupees. The total net foreign inflow stood at 22 billion rupees so far for this year.
Analysts said, with the global fuel prices coming down and the stability in fuel prices in the country, Lanka IOC shares were reactivated.
An analyst said, the food related, agriculture counters have also been getting activated, because there has been a spike in investor interest in the plantation segment.
The Paris Club group of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s prevailing currency crisis.
Former Central Bank Governor Indrajit Coomaraswamy said in a forum last week that the government is in discussions with Asian Development Bank (ADB) and World Bank to get loans of 1.9 billion US dollars after a reform program with the International Monetary Fund is approved.
A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.
The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.
In the last few sessions, market gained after the Central bank governor said interest 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.
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.
The more liquid index S&P SL20 closed 0.31 percent or 8.82 points higher at 2,844.48.
So far in December ASPI gained 2.7 percent.
The ASPI gained 0.5 percent in November after losing 13.4 percent in October.
It has lost 27.2 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.
Richard Pieris and Company pushed the index up to close at 10 percent higher at 24.2 rupees.
John Keells Holdings gained 1.7 percent to close at 149.3 rupees and Lanka IOC closed 2.9 percent up at 214.6 rupees a share. (Colombo/Dec 07/2022)