Sri Lanka stocks jump to one-week high after embattled president announces resignation
“It seems like the market will gain for a few days but it is unsustainable as there’s a lot of uncertainties on the political front.”
On Saturday, Sri Lanka saw protesters storming the President’s official residence in Colombo, demanding his resignation by force after he refused to quit as a failed president.
Later on the same day both the President and Prime Minister announced they will be stepping down.
The more liquid S&P SL20 index gained 4.14% or 92.84 points to 2,337.67.
On July 07, the central bank raised interest rate at which overnight money is printed for banks by 100 basis points to 15.5 percent, its highest since September 2001 as the country was gripped by galloping inflation and depreciation. On Wednesday, the yields in T-bills rose by over 400 basis points.
Sri Lanka is facing the worst fuel crisis in its post-independent era.
The turnover was 811 million rupees, less than a quarter of this year’s daily average turnover of 3.27 billion rupees.
The main ASPI has lost 0.54% in July so far after falling 9.3% in June, reversing a 6% gain in May. It lost 23% in April followed by a 14.5% fall in March.
The market has lost 40.3% so far this year after being one of the world’s best stock markets with an 80% return last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
Foreigners bought a net of 3.4 million rupees. The total foreign outflow so far this year is 928 million rupees.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Sampath Bank gained 10.7% to 29.1 rupees a share.
Expolanka rose 6.9% to 174.3 rupees a share, while Browns Investment closed 14.3% stronger at 7.2 rupees a share. (Colombo/July11/2022)
