ECONOMYNEXT – Sri Lanka shares close up high on Tuesday after buying interest was stimulated in banking and index heavy shares through senses of economic stabilization, an analyst said.
The main All Share Price Index was up 0.36 percent or 42.56 points to 11,724.22, this is the highest the market has been since February 18, while S&P SL20 was up 0.66 percent or 22.69 points to 3,470.13.
“The economy has channeled some stability and some recovery, resulting in buying power for the banking sector and blue chip counters,” an analyst said.
During mid day trade, the market saw some profit taking on the banking sector.
Sri Lanka’s consumer price inflation fell to 6.3 percent in 12-months to July 2023, with food prices deflating 1.4 percent over the year, data from the state statistics office showed.
The widely watched Colombo Consumer Price Index fell 1.1 percent over the month of July.
Sri Lanka’s central bank has generated only 0.47 percent inflation in since September 2022, when deflationary open market operations began to show up in the balance of payments as a surplus.
Interest rates being lowered has channeled interest on the overall counters.
Sri Lanka President Ranil Wickremesinghe has said debt restructuring is matter involving public finances coming under parliament and not courts, and has called opposition groups not to disrupt the process through legal action, a statement said.
“Public finance belongs to parliament,” President Wickremesinghe was quoted as saying at a forum of coconut farmers on Friday.
“This plan has already been approved by parliament. This process will only be halted on the instructions of parliament. We cannot take orders or instructions from anyone else.”
“So, I am telling smaller parties not to create un-necessary problems.”
“There is spread in the market; investors are investing in the capital sector, blue chip companies, banking and diversified financials and tourism counters,” the analyst said.
This is the fifth straight session where the market has been closing on a positive and green sentiment, analysts said that buying interest overpowers selling and profit taking due to signs of economic stabilization and recovery.
“There is an assumption that earnings reports will be favorable, channeling continuous interest in the market,” an analyst said.
The market generated a turnover of 2.7 billion rupees, majority of the revenue came in from the banking sector bringing in 858 million rupees and the capital sector brought in 880 million rupees, while the yearly average stands at 1.8 billion rupees.
Sri Lanka’s announced domestic debt restructuring plan has avoided adding to the “fragility” of the banking system, World bank Country Director Faris Hadad-Zervos said.
Sri Lanka kept banks, which have already been hit by bad loans and mark-to-market losses out of re-structuring plan.
Sri Lanka’s consumer price inflation fell to 6.3 percent in 12-months to July 2023, with food prices deflating 1.4 percent over the year, data from the state statistics office showed.
More than 94 percent of remaining holders of dollar denominated Sri Lanka Development Bond holders have agreed to exchange for longer term rupee bonds, a government statement said.
Out of 837.5 million dollars of remaining SLDBs, owners of 791.4 million dollars of bonds have offered to exchange and the offer has been accepted, the Finance Ministry said.
Of that 814.83 million was from institutional investors. Without individuals, 97.13 percent of holders have accepted the offer. With individuals, 94.49 percent have accepted the offer.
Gainers during trade were John Keells Holdings, Commercial Bank and Lanka IOC.
The market saw a net foreign inflow of 554 million rupees, while the yearly net foreign inflow was 5.2 billion rupees. (Colombo/Aug03/2023)