ECONOMYNEXT – Sri Lanka stocks closed 0.31 percent lower on Monday (11) in thin trade with market heavy weights dragging the index down as possible policy rate hike at the central bank’s monetary board meeting later this week weighed on the sentiment, brokers said.
The Colombo benchmark All Share Price Index fell 29.63 points to close at 9,649.26.
The S&P SL20 index of more liquid stocks fell 1.19 percent or 43.06 points to close at 3,570.08.
ASPI opened the day on a positive note but remained volatile and sliped during mid-day trade to 9,619.78 and picking up marginally to before close.
The central bank will announce the policy rates on Thursday under the new governor Ajith Nivard Cabraal and many analysts see at least a 50 basis point hike in the key policy rates as the central bank has allowed the treasury bill rates to rise, signalling such an increase.
Sri Lanka’s withdrawal of price controls have resulted in many essentials including LP gas to raise the prices in line with global market prices to minimise the losses. Brokers said the move along with the possibility of the government allowing further fuel price hike also helped to boost energy related shares.
“With price reforms taking place, stocks in Laugfs gas company and Lanka IOC company gained. But on heavy weights it seems like the investors took a step back” a stockbroker said.
“But overall the market was not much active”
Sri Lanka decided to abandon price controls which were creating shortages of essential goods amid rising global prices and a weakening of the rupee against the dollar.
Foreign investors continued to sell and on Monday they sold a net 108.2 million rupees worth of shares on Friday continuing the trend of net foreign selling since early last year. The market has suffered a net foreign outflow of over 44.4 billion rupees so far this year.
The day’s turnover was 2.5 billion rupees, below this year’s average daily turnover of over 4 billion rupees.
The fall was led by Expolanka Holdings, John Keells Holdings and Commercial Bank of Ceylon.
Expolanka Holdings, the market heavyweight which has a significant export component in its business, fell 1.30 percent to close at 190.25 rupees a share.
John Keells Holdings fell 1.64 percent to close at 150.25 rupees a share while Commercial Bank of Ceylon fell 3.23 percent to 87 rupees.
With price controls being lifted Laugfs Gas Plc gained 10.7 percent to close at 28.90 rupees a share.
Lanka IOC gained 12.7 percent to close at 26.70 rupees a share.
The Materials Industry Group Index gained 0.89 percent and Energy Industry gained 11.9 percent. (Colombo/Oct 11/2021)