Sri Lanka stocks end at over 2-month high after 7th session gain on signs of political stability
ECONOMYNEXT – Sri Lanka stocks gained for the seventh consecutive session on Friday (05) reaching a new highest in more than two months as buying interest in the market continued following signs of political stability in the country.
The turnover was 3.75 billion rupees, more than this year’s average daily turnover of 3.05 billion rupees.
The main All Share Price Index (ASPI) rose 1.27% or 104.23 points to 8,333.37, its highest since May 25. It has risen 9.3% in the last seven sessions.
President Ranil Wickremesinghe in the Parliament on August 3 revealed the plans on a 4-year IMF loan
programme, debt restructuring, fiscal reforms, and dealing with loss making state owned enterprises.
On Friday, he said Sri Lanka will have to deal with the IMF.
“Whether we like it or not, we have to deal with the IMF. First and foremost, we have to enter into the standby agreement with the staff level agreement with the IMF,” Wickremesinghe delivering the key note address, told an economic forum in Colombo.
“When we are negotiating with the IMF, one of the biggest issues we have to face is the government
change and policies change. Are we prepared to stand by, to support the agreement?”
Sri Lanka has already declared sovereign debt default on April 12 this year and failed to pay its first
sovereign debt in May amid deepening economic crisis which later turned into a political crisis and led to the change in the president, cabinet, and the government.
He said the country should focus on the foreign debt first and navigate through without getting caught
into the geopolitics of the Asian region.
The more liquid S&#38;P SL20 index moved up, closing at 1.89% or 50.48 points stronger at 2,728.14.
Sri Lanka is facing its worst fuel and economic crisis in its post-independent era and the economy is
expected to contract 7% this year.
The main ASPI gained 6.4 percent in August so far after gaining 5.3% in July. It lost 9.3% in June, 23% in April, and 14.5% in March.
The market has lost 32.7% 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.
Net foreign sales was 265 million rupees while the total net foreign outflow so far is 858 million rupees.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Hayleys which pushed the ASPI, closed 10.2% up at 94.8 rupees a share, Melstacorp closed 8.8% up at
44.7 rupees a share, while LOLC gained 6.5% to 507 rupees. (Colombo/Aug 05/2022)