ECONOMYNEXT – Sri Lanka’s shares gained on Thursday, as the short week has pushed up market momentum, an analyst said.
“The market moved on an upward trend, bouncing back after muted sentiments,” an analyst said.
The main All Share Price Index (ASPI) was up 0.35 percent or 30.45 points to 8,830.36.
“The market moved up on low volumes, there was magnitudes of bargain hunting and selling pressures triggered,” an analyst said.
“The trend should pick up in the days to come,” an analyst said.
The most liquid index, S&P SL20, was up 0.97 percent or 24.64 points to 2,558.67.
The market had been on continuous muted sentiments due to fears of domestic debt restructuring, poor earnings performance, and comments by the President on the potential closure of the stock market. Sri Lanka’s Stock Market closed at 12 PM as Vesak falls on a Saturday.
The market generated a turnover of 252 million rupees and the total turnover was below the daily average of 1.5 billion rupees. Colombo Stock Exchange data showed that revenue turnover generation was pretty even spread amongst all sectors.
Top gainers were Commercial Bank, Sampath Bank and Vallibel One.
Sri Lanka is confident of meeting its debt resturing objectives and no longer intends to borrow for infrastructure projects that don’t promise returns, Foreign Minister Ali Sabry said, adding that the country has learnt its lesson.
“We have made a lot of progress. Prior actions except some minor ones were taken before the extended fund facility (EFF) was approved. We have introduced cost-reflective pricing in many areas. State-owned enterprise (SOE) reforms are on the cards. Tax reforms have come into play. There is a sense of stability in the country. We have eliminated all sorts of queues and shortages,” he said.
The minister was emphatic that any debt restructuring effort should feature equal treatment for all of Sri Lanka’s creditors. Whether it’s debt relief or some other form of restructuring, the same standard must apply universally, he said. Thus far that is the latest insight on debt restructuring provided from the government’s end.
Sri Lanka’s banks have sought clarity on a proposed domestic debt restructure, questioning whether there is a non-voluntary element in the plan, and have also called for transparent discussions with all banks.
Sri Lanka’s Central Bank and Treasury officials have said that there will be voluntary debt ‘optimization’ for domestic debt holders.
Banks said they are seeking clarity on what is meant by voluntary debt optimization, and whether there is a non-voluntary element that applies to state banks and pension funds.
The market also generated a foreign inflow of 32 million rupees, having an outflow of 6 million rupees bringing the net foreign inflow to 25.7 million rupees. (Colombo/May04/2023)