ECONOMYNEXT – Sri Lanka’s share jumped to more than three-month high on Monday (23), on overall positive sentiment following assurances from India and China on debt restructuring, boosting overall market sentiment, dealers said.
The main All Share Price Index (ASPI) closed at 3.13 percent or 272.64 points higher at 8,990.94, its highest close since October 14, last year.
Shares had seen a broad base pick up after assurances from India and China over the ending of the week, prompting the market to move on green, an analyst said.
Mixtures of the possible IMF loan coming sooner, positive outlooks on debt restructuring, speculations on commercial banks not being extended towards domestic debt restructuring have driven the market upwards, he said.
Over the weekend, Beijing had given Sri Lanka a positive response over the request for debt re-structuring the Exim Bank of China has indicated that they are willing to support Sri Lanka’s debt re-structuring efforts, State Finance Minister Shehan Semasinghe said.
The Indian government last week informed the International Monetary Fund (IMF) on January (19), that it strongly supports Sri Lanka’s debt restructuring efforts in the latter’s bid to secure a 2.9 billion dollar extended fund facility (EFF).
Banking counters have significantly moved up due to speculations that domestic debt restructuring may not be extended to commercial banks, the analyst said.
Sri Lanka is expecting to get top executive board approval from the International Monetary Fund (IMF) for a 2.9 billion dollar loan, officials say, and that is expected to improve the country’s rating before the island nation seeking borrowing from global capital markets.
The most liquid index S&P SL20 closed higher at 3.48 percent or 94.72 points at 2,818.94.
First quarter of 2023 is expected to be negative with the taxations going in to effect from January 1 amid electricity tariff hike, which has got Cabinet approval and Sri Lanka’s Public Utilities Commission has taken a U Turn on the retrospective tariff hike.
The second quarter of 2023 is expected to be more positive with the anticipation of IMF getting through and with the interest rates expected to ease as the taxes starts to generate funds, dealers say.
Sri Lanka is expecting a further contraction in the economy after a negative growth in 2022, Cabinet Spokesperson Bandula Gunawardena said at the Weekly Cabinet Press Briefing.
The market witnessed a turnover of 2 billion rupees, higher than this month’s daily average of 1.9 billion rupees. However, it is also comparatively lower than 2022 daily average turnover of 2.9 billion rupees.
Top gainers at market close were Richard Pieris, Commercial Bank, Sampath Bank and LOLC. (Colombo/Jan23/2022)