ECONOMYNEXT – Sri Lanka’s main stock index fell 0.95 percent on Monday (06) as investors booked profits after a rally in the previous two weeks amid rise in the de facto policy rate and foreign outflows, brokers said.
Analysts had expected a market fall with the central bank’s decision to raise key monetary policy rates by 50 basis points on August 19 and a 2 percent hike on Statutory Reserve Ratio (SRR) from September 1.
However, investors came strongly into the market with available margin credit at the beginning of a new month.
The central bank on Monday raised a ceiling yield on 12-month Treasury bills by 08 basis to 6.05 percent. That yield serves as a de facto policy rate when real auction bids above the rate are replaced with printed money.
The index closed at 9,227.88 points after pendulum moves.
The S&P SL20 index of more liquid stocks fell 1.13 percent or 39.53 points to close at 3,455.23.
Brokers said speculation of the country, which is facing some tough economic challenges including external debt repayment, seeking an IMF debt restructuring could also boost the sentiment.
However, the government has said no such decision has been taken yet.
Foreign investors sold a net 382.1 million worth of shares on Monday, and the market has suffered a net foreign outflow of over 40.8 billion rupees so far this year.
Analysts had expected a market correction soon when the central bank’s tightening measures.
The day’s turnover was 7.7 billion rupees, well over this year’s average daily turnover of 3.9 billion rupees.
The fall was led by Expolanka Holdings, Brown Investments and Commercial Leasing and Finance.
Market heavyweight Expolanka Holdings, which has a significant export component in its business, fell 2.81 percent to close at 181.50 rupees.
Commercial Leasing and Finance fell 3.59 percent to close at 21.50 rupees and Browns Investments fell 2.65 percent to close at 11.00 rupees a share.
LOLC Holdings fell 0.89 percent to close at 612.00 rupees a share and Dhammika Perera’s Vallibel One fell 4.05 percent to close at 66.40 rupees a share.
The bourse saw 82 stocks gaining against 105 falling on Monday. (Colombo/September 06/2021)