ECONOMYNEXT – Sri Lanka shares fell on Friday for a fifth straight session and closed at more than three-and-a-half month low amid negative sentiment over high taxes and fee announced in the budget and the government’s indecisive stance regarding local debt restructuring, stockbrokers said.
The main All Share Price Index (ASPI) closed 2.7 percent or 216.89 points lower at 7,817.89, its lowest since August 1.
“Investors took a waiting stance till proper directions are being given and also there is no proper information regarding the IMF deal as well,” an analyst said.
Even though no proper decision has been taken regarding the local debt restructuring, there is
speculation that a second nominal default and re-structure will be imposed on rupee debt holders,
which has kept interest rates elevated, market analysts say.
The budget saw policies that will increase the cost of doing businesses across the board, but relieving
the government from depending on excess money printing, analysts say.
The market witnessed a turnover of 1.4 billion rupees, less than half of this year’s daily average turnover of 3 billion rupees.
The market saw a foreign inflow of 94 million rupees, extending the total net foreign inflow to 18.2 billion rupees so far for this year.
Analysts said, a bearish sentiment can be expected in the banking and financial sector until a clear
direction is given by the government on local debt restructuring.
The market has been on a falling trend as investors awaited for cues on policies from the 2023 budget.
Investors are also concerned over the impact of local debt restructuring on risky assets, analysts have
said, as the market is waiting for a debt restructuring decision between the government and its creditors ahead of an IMF loan approval.
The more liquid index S&P SL20 closed 3.2 percent or 78.64 points lower at 2,381.53.
The ASPI has fallen 9.1 percent so far in November after losing 13.4 percent in October. It has lost 36.1 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, dragging the market down, fell 7.7 percent to close at 122.8 rupees a share.
Richard Pieris and Company fell 7.8 percent to close at 20 rupees’ while Lanka IOC closed down 5.3
percent at 164.3 rupees.
The listed companies have shown reasonable profits in their third quarter of the year, however, analysts say the disposable income of the general public due to proposed tax hikes is the main reason for the negative expectations over the December earnings. (Colombo/Nov18/2022)