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Friday January 21st, 2022
Markets

Sri Lanka stocks surge 7 pct so far in 2022, new daily gain

ECONOMYNEXT – Sri Lanka’s main stock index has gained 7 percent in the first three days of 2022 as it breached the previous all time high on a daily basis with investors betting on risky assets in the wake of rising inflation and negative returns for fixed deposits.

The main All Share Price Index (ASPI) has gained 850.9 points in the first three days including a record single day point gain of 399.81 on Tuesday, the Colombo Stock Exchange data showed.

It surpassed its previous day record high on all three days with investors flocking into the risky assets expecting more returns after the island nation’s bourse recorded 80.5 percent return last year.

Sri Lanka’s fixed income yields are below 8.4 percent, but the inflation has hit double digits in December due to excess money printing by the central bank.

“Many investors are now coming into stocks because of negative returns and we see high turnovers these days,” a senior analyst told EconomyNext.

The daily average turnover in the first three days was 12 billion rupees, three times of last year’s daily average turnover of around 4 billion rupees, the bourse data showed.

Market heavyweights like Expolanka, LOLC, and LOLC Finance have boosted the index in the first three days, but analysts say high volatility index will be limited when the Colombo Stock Exchange introduces a new index compilation measure later this month.

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