Sri Lanka’s actions reach new high after government relief plan; exit of foreigners

ECONOMYNEXT – Sri Lanka stocks closed at a new all-time high on Tuesday (04) and gained for the fourth session in a row, breaking through the 12,800 ASPI benchmark as excess liquidity in the market at higher interest rates Lower helped buy a day after the government announced Rs 229 billion relief package, brokers said.

However, foreign investors sold Rs 596.1 million net of shares. The stock market suffered over Rs 50 billion from foreign capital outflows last year.

A Colombo-based analyst said foreign investors had left due to speculation that the local rupee would depreciate sharply, with the central bank holding it around 200 against the US dollar, while local importers say they are forced to buy dollars above 250. rupees on the gray market amid severe import restrictions.

Sri Lanka faces the risk of defaulting on its sovereign debt after a series of credit downgrades by the three global rating agencies, but the government has said it will repay all loans despite falling reserves to their fullest. low in more than a decade in November of last year. However, the central bank said reserves had jumped to around $ 3.1 billion by the end of 2021 without revealing the source of the inflows.

On Tuesday, the index gained 174.72 points, to 12,800.54, another highest close on record, a day after the previous day’s record gain of 399.81 points. The gain is due to local sentiment over excess liquidity, falling interest rates and the Rs 229 billion government aid package announced later Tuesday, brokers said.

“The market continues to have the same positive sentiment for the fourth session. There is no volatility in the market at the moment, we are seeing very strong buying interest mainly on the retail side, ”a senior market analyst told ECONOMYNEXT.

Last year, CSE had 13 share issues, raising nearly Rs. 12 billion.

ASPI increased by 80.5% in 2021 compared to the end of the previous year by 6774.22 points.

The S&P SL20 of the most liquid index rose 2.72% or 114.99 points to 4,348.24.

Turnover for the day was 10.8 billion rupees, more than double last year’s daily average of around 4 billion rupees.

On Tuesday, LOLC Holdings and its mainly LOLC Finance subsidiary pushed ASPI towards its record gain.

LOLC gained 5.29% to close at Rs 1,273.50 per share, LOLC Finance gained 12.69% to close at Rs 30.20 per share, while LOLC Development Finance rose 10.73% to close at 376.75 rupees per share.

Another market analyst said there is a lot of interest in LOLC shares as investors speculate on Chinese investments in the company after the Chinese Foreign Minister’s next visit to the island later this week.

Expolanka, the market heavyweight, which has export and freight business, turned the tide and fell 1.16% to Rs 382.25 per share.

(Colombo / Jan04 / 2022)

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