ECONOMYNEXT – Sri Lanka’s stocks closed at a fresh all time high on Tuesday (04) and gained for the fourth consecutive session, crossing 12,800 ASPI benchmark as excess liquidity in the market at lower interest rates helped buying a day after the government announced 229 billion rupee relief package, brokers said.
However, foreign investors sold a net 596.1 million rupees worth of shares. The bourse suffered over 50 billion rupee foreign outflow last year.
A Colombo-based analyst said foreign investors had been leaving due to speculation of sharp depreciation in the local rupee currency as the central bank has been holding it at around 200 level against the US dollar while local importers say they are compelled to buy dollars above 250 rupees in the gray market amid tough import curbs.
Sri Lanka is facing risk of sovereign debt default after a series of credit downgrading by all three global rating agencies, but the government has said it will repay all the loans despite the reserves plummeting to its lowest in more than a decade in November last year. However, the central bank said the reserves have jumped to around 3.1 billion US dollars by end 2021 without disclosing the source of inflow.
On Tuesday the index gained 174.72 points, to 12,800.54, another highest close ever, a day after the previous day’s record gain of 399.81 points. The gain was due to local sentiment on excess liquidity, lower interest rates and the government’s 229 billion rupees relief package announced later on Tuesday, stockbrokers said.
“The market is continuing on the same positive sentiment for the fourth session. There is no volatility in the market at the moment we are seeing very strong buying interest coming in mainly on the retail side,” a senior market analyst told ECONOMYNEXT.
Last year CSE had 13 equity issues, raising nearly Rs. 12 billion.
ASPI rose 80.5 per cent in 2021 from the previous year’s end of 6774.22 points.
S&P SL20 of the more liquid index rose 2.72 percent or 114.99 points to 4,348.24.
The day’s turnover was 10.8 billion rupees, more than twice of the last year’s daily average of around 4 billion rupees.
On Tuesday, LOLC Holdings and its subsidiary mainly LOLC Finance pushed ASPI to its record gain.
LOLC gained 5.29 percent to close at 1,273.50 rupees a share, LOLC Finance gained 12.69 percent to close at 30.20 rupees per share, while LOLC Development Finance rose 10.73 percent to close at 376.75 rupees a share.
Another market analyst said that LOLC shares have a lot of interest because investors speculate some Chinese investment into the company after the Chinese Foreign Minister’s upcoming visit to the island later this week.
Expolanka, the market heavy weight, which has export and freight businesses, bucked the trend and slipped 1.16 percent lower at 382.25 rupees a share