ECONOMYNEXT – Sri Lanka’s stocks gained to close at a two months high on Thursday on strong positive sentiments as the deal of the extended loan facility from the International Monetary Fund (IMF) reaching is expected to be finalized by the end of the month, brokers said.
“There are strong expectations on the International Monetary Fund and Monetary Policy,” an analyst said.
“The market is running on speculation and the sentiment is getting stronger showing more buying interest and a smooth gradual uptrend.”
Analysts said significant interest in banking, the non-financial sector and the retail sector was seen, due to potential conclusions on the IMF agreement and a rate cut along with the finalization of the loan.
The All Share Price Index (ASPI) gained 1.21 percent, or 111.15 points, to reach 9,333.83.
The loan from the IMF was originally expected in December of last year, but it is now expected in the second quarter.
As creditors of the island nation, India and the Paris Club have given specific assurances to restructure the sovereign debt of Sri Lanka’s external borrowing.
Meanwhile, China has given a two-year moratorium and promised to restructure debt, but Sri Lanka has sought a more specific assurance in line with the IMF deal.
China has not yet given such assurances and has instead called for relief from the World Bank, Asian Development Bank, and the IMF, which are considered “senior debt” under current resolution frameworks and are insulated.
The market saw a Net foreign inflow of 47.9 million rupees and so far for 2023, the market has recorded a total Net foreign inflow of 3.1 billion rupees.
The most liquid index, S&P SL20, closed 0.83 percent, or 23.22 points, up at 2,828.48.
The market saw a turnover of 1.4 billion rupees on Thursday, lower than this year’s daily average of 1.8 billion rupees and the 2022 average turnover of 2.9 billion rupees.
The top gainers were Hatton National Bank, Sampath Bank and Commercial Bank. (Colombo/Mar 01/2023)