Sri Lanka stocks reverse gains, banks slip
ECONOMYNEXT- Sri Lanka’s stocks closed 0.30 percent lower on Thursday, reversing Wednesday’s gains, amid the government withdrawing a supplimentary estimate to a vote-on-account from parliament.
The All Share Price Index (ASPI) at the Colombo Stock Exchange closed 17.32 points down at 5,830.51, ending a two-day rally.
The ASPI rose to a high of 5,848.79 in the first hour of trade and gradually fell until mid afternoon, when the index dove a further 8 points to a low of 5,818.18 amid the withdrawal of the supplementary estimate in parliament.
The ASPI then recovered in the final minutes of trading.
The S&P SL20 Index of more liquid stocks closed 0.67 percent or 18.80 points down at 2,788.31, after experiencing volatility throughout the day.
The opposition in parliament expressed its intentions to not support an expansion in the government budget for the first four months of 2020, which led to the minority government withdrawing the proposal.
The government had said that additional spending is required as the former regime did not pay bills to contractors, and borrowed above limits.
Former Finance Minister Mangala Samaraweera blamed the new government for cutting taxes giving effect to ill-thought election promise and is now trying to blame the last administration for the lack of fiscal space.
Meanwhile, the market turnover was 735.97 million rupees with 37 stocks gaining and 78 falling.
State owned Sri Lanka Telecom closed 1.10 rupees down at 29.60 rupees a share, contributing most to the ASPI’s fall.
Index-heavy John Keells Holdings closed 70 cents lower at 155.50 rupees a share and the related Nations Trust Bank fell 3.00 rupees to 75.00 rupees a share, also contributing to the ASPI’s decline.
The banking industry index closed 0.75 percent lower, while the consumer durables and apparel industry index closed 1.70 percent lower with selling in Teejay Lanka Plc, a fabric maker.
Meanwhile, Ceylon Tobacco Company stock closed 18.30 rupees up at 1,150.20 rupees, arresting the ASPI’s fall.
There was a 22.6 million rupee negotiated crossing in Hemas Holdings at 70 rupees a share and the stock closed 30 cents up at 70.30 rupees a share. (Colombo/Feb 20/2020)
Kithmina Hewage- Institute of Policy Studies