ECONOMYNEXT – Sri Lanka’s stock index fell 1.77 percent on Friday (18) to its lowest in more than one week low with investors were forced to sell their stake to settle broker credit amid economic concerns, brokers said.
The main All Share Price Index (ASPI), closed 218.34 points lower at 12,134.34 points, its lowest since February 9.
“The forced selling continue as the market has been come down gradually. The main concern most investors have is if there could be margin calls. If that happens, they will have to sell their shares at whatever the prices they are now trading,” a market analyst said asking not to be named.
The forced selling comes because investors have used broker credit.
SL20 of the more liquid index closed 1.90 percent or 80.30 points weaker at 4,144.36.
Analysts had predicted a downtrend in the market due to the uncertainties in the market and the economy. The market lost 2.6 percent this week after falling 2.3 percent last week.
The index has lost 0.75 percent so far this year and 6.82 percent so far for the month despite listed companies posting better than expected earnings in December quarter.
The day’s turnover was 5.1 billion rupees with LOLC Finance Plc accounting for around 58 percent of the turnover. However, it was less than this year’s average turnover of 6.9 billion rupees.
The market has been in a declining trend due to ongoing forex crisis most companies going through, despite many companies posting better-than-expected earnings in the December quarter.
The rupee exchange rate is fixed at around 200 rupees by the central bank, but it is now above 250 rupees per dollar in the grey market.
Foreign investors, who are highly worried about possible sharp depreciation or devaluation in the currency, sold a net of 11.1 million rupees worth shares on Friday.
The foreign sales so far this year has been 3.3 billion rupees. In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.
Analysts had predicted that the economic concerns would drag the market from time to time until the government finds a sustainable solution for the country’s looming debt crisis.
LOLC Holdings, John Keells Holdings and Expolanka dragged the market down on Friday.
LOLC Holdings fell 3.5 percent to close at 1,118.25 rupees a share,while John Keells lost 1.6 percent to close at 155.25 rupees per share.
LOLC Finance Plc lost 7.8 percent to 24.80 rupees a share.
Expolanka, the market heavyweight which has export and freight businesses, slipped 2.3 percent to close at 311.50 rupees. (Colombo/Feb18/2022)