An Echelon Media Company
Monday December 5th, 2022

Sri Lanka stocks end the week gaining for the 11th session, setting a new 4-month high

Stocks fall for the first time in five sessions.

ECONOMYNEXT – Sri Lanka stocks continued to gain for the 11th consecutive time on Friday August 12 ending its highest in more than four months passing the 9,000 psychological mark, pushed up by mainly by energy, capital goods and plantation sectors, dealers said.

The turnover exceeded 6.3 billion rupees, twice this year’s average daily turnover of 3.07 billion rupees.

The main All Share Price Index (ASPI) rose 3.69% or 321.31 points to 9,027.48, its highest since March 31. The index has risen 17.5% in the last 11 sessions.

“With the usual Lanka IOC movement there was very high movement in the plantation industry with the prices of both tea and rubber increasing in the local market as well as in the global market,” a top market analyst said.

The analyst said they saw a renewed buying interest in the sectors due to the profits shown in the quarterly reports.

“However, we must wait and see how long this upward trending will last.

“Especially with the interim budget, investors expects lots of changes in the taxes. So it is still unclear how the market will react in the coming two weeks.”

On Tuesday, Sri Lanka announced a 75 percent electricity tariff hike.

Investors previously feared the move would drag the market down due to possible higher costs for manufacturing firms.

The government tabled an interim budget on Tuesday, revising the budget presented last year as the country is going through an unprecedented economic crisis amid plans plans on a four-year IMF loan programme, debt restructuring, fiscal reforms, and dealing with loss-making state-owned enterprises.

Sri Lanka already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to a change in the president, cabinet, and government.

The more liquid S&P SL20 index moved up, closing at 4.88% or 143.05 points stronger at 3,072.01.

Sri Lanka is facing its worst fuel and economic crisis in its post-independence era and the economy is expected to contract 7 percent this year.

The main ASPI gained 12.6 percent in August so far after gaining 5.3 percent in July. It lost 9.3 percent in June, 23 percent in April, and 14.5 percent in March.

The market index has lost 28.7 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.

Net foreign outflow was 155 million rupees on Friday while the total net foreign outflow so far this year is 1.2 billion rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Lanka IOC which pushed the ASPI, closed 12.9 percent up at 172.5 rupees a share, Hayleys closed 11.06 percent up at 119.8 rupees a share, and Richard Pieris gained 17.9 to 23.7 rupees. (Colombo/Aug12/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka’s shares gain in mid market trade

ECONOMYNEXT – Sri Lanka’s shares edged up in mid day trade on Monday (05), continuing the positive run for seven straight sessions on news over a possible debt restructuring from Paris Club, analysts said.

All Share Price Index gained by 0.69% or 60.10 points to 8,829, while the most liquid shares gained by 0.96% or 26.59 points to 2,801.

“The market was pushed up over the news of a potential 10 year debt moratorium,” analysts said.

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. 

Related – Paris Club proposes 10-year moratorium in 15-year Sri Lanka debt re-structure: report

The market generated a revenue of 2.1 billion rupees.

Top gainers during 1130 hours were Expolanka, Browns Investment and LOLC.  (Colombo/Dec05/2022)

 

Continue Reading

Sri Lanka bond yields slightly down

ECONOMYNEXT – Sri Lanka’s bond yields were slightly down at open on Monday while t- bills were inactive, dealers said.

The Central Bank’s guidance peg for interbank transactions was at 363.18 rupees against the US dollar, appreciated from 363.19 rupees on Friday.

“Only one bond is being quoted today, and the rest remaining unquoted” a dealer said.

A bond maturing on 15.05.2026 quoted at 29.30/30.00 percent down from 29.50/75 percent at Friday’s close.(Colombo/ Dec 03/2022)

Continue Reading

Sri Lanka should prioritize RCEP , not small FTAs: economist

ECONOMYNEXT – Sri Lanka should make joining the Regional Comprehensive Economic Partnership (RCEP) a priority instead of trying to negotiate multiple smaller deals, an economist has said.

“We do not have the bandwidth in government and the technical resources to do multiple trade agreements,” Anushka Wijesinghe an economist who has been involved in trade told a business forum in Colombo.

“I think RCEP should be number one priority, rather than three or four tiny bilateral goods agreements.”

Sri Lanka is trying negotiate a free trade deal with China and expand an existing one with India.

Data show that Sri Lanka has been able to boost exports with FTAs.

Sri Lanka has high tariff protection which ultimately backfire.

Sri Lanka has protectionist business interests their profits from overpriced goods have had priority over ordinary consumers and overall economic efficiency that comes from free trade.

Sri Lanka also has monetary instability, which has worsened under flexible inflation targeting, with a series of currency crises coming in rapid successions.

Forex shortages from mis-targeted interest rates under flexible or discretionary monetary policies have discredited free trade and liberalization in general and strengthened the hands of economic nationalists, analysts say.

The country also has monetary instability, which makes life difficult not only for investors but all economic agents.

Over the past two decades Sri Lanka’s exports have not grown as much as competitors. (Colombo/Dec05/2022)

Continue Reading