ECONOMYNEXT – Sri Lanka stocks gained 2.54 percent on Thursday, its first rise in five sessions, recovering some of the losses from the continuous fall with foreign investors buying shares on a net basis, brokers said.
The index suffered its largest percentage fall since February 22 on Wednesday, a day after finance minister revealed the grim reality of the economy and external sector.
Sri Lanka on Thursday announced further import restrictions on items ranging from chocolates and wine to raincoats and carpets as the country faced foreign exchange shortages as large volumes of money were printed.
Banks have also been barred from giving credit for importers to meet the margins, according to a new central bank circular.
The index continued to increase throughout the day and reached 9,003.75 market during the last hour in to trading.
The index closed 222.19 points up at 8,986.40 points.
The S& P SL20 index of more liquid stocks gained 1.9 percent or 63.02 points to close at 3,376.04.
The country’s risky assets have unusually gained partly due to record low-interest rates, excess liquidity in money markets, and some businesses being disrupted due to import controls triggered by money printing. The trend of net foreign selling has been continuing since early last year.
Foreign investors bought a net 104 million worth of shares on Thursday. The market, however, has suffered a net foreign outflow of over 41 billion rupees so far this year.
The day’s turnover was 5.7 billion rupees, just over this year’s average daily turnover of over 4 billion
The gain was led by, LOLC holdings, Commercial Leasing and Finance and Brown Investments,
LOLC Holdings gained 3.56 percent to close at 560.25 rupees a share.
Browns Investment, a subsidiary of the LOLC, gained 8.70 percent to close at 10.00 rupees and Commercial Leasing and Finance closed 8.47 percent up at 20.50 rupees a share.
Expolanka Holdings, the market heavyweight which has the highest market capitalization in the market and a significant export component in its business, gained 2.34 percent to close at 175.00 rupees a share.
Expolanka in a disclosure to the bourse said it had bought a 100 percent stake in US-based Complete Transport System LLC through one of its overseas units 6.1 million US dollars.
The bourse saw 157 stocks gaining against 33 falling on Thursday.
The broker said the import and export industries have been impacted due to a mismatch between the dollar rate quoted by the central bank and the rate at which importers can buy.
Brokers said, if a market correction starts, the market will fall by 10-15 percent. (Colombo/September 09/2021)