ECONOMYNEXT – Sri Lanka stocks rose for the ninth consecutive session on Tuesday (09) and generated the highest turnover in five months, boosted by shares in the energy sector, mainly Lanka IOC, the country having authorized the energy company to open 50 service stations across the island in a bid to avert a future fuel crisis, dealers said.
The turnover was 5.3 billion rupees, more than this year’s average daily turnover of 3.06 billion rupees. Highest since March 25.
Lanka IOC contributed about 40% or 1.99 billion to the market turnover.
The main All Share Price Index (ASPI) rose 0.91% or 77.03 points to 8,500.00. It has increased by 10.6% over the past nine sessions.
“The market continues to move on Lanka IOC and we think some investors may turn to stocks from term deposits,” said a market analyst.
However, there are also sales on the heavyweights of the market.
On Tuesday, Sri Lanka announced a 75% hike in electricity tariffs.
Investors say the move will add to the woes of manufacturing companies.
The government tabled an interim budget on Tuesday, revising the budget presented last year as the country faces an unprecedented economic crisis.
President Ranil Wickremesinghe in Parliament on August 3 revealed plans for a 4-year IMF loan program, debt restructuring, tax reforms and the management of loss-making public enterprises.
On Friday, he said Sri Lanka will have to deal with the IMF as the country is expected to introduce heavy taxes and other revenue methods to show the IMF.
Sri Lanka already declared default on its sovereign debt on April 12 this year and failed to repay its first sovereign debt in May amid a deepening economic crisis which later turned into a crisis. politics and led to the change of president, cabinet and government.
The more liquid S&P SL20 index rose, closing 0.35% or 9.73 points higher at 2,803.88.
Sri Lanka is facing its worst energy and economic crisis in its post-independence era and the economy is expected to shrink by 7% this year.
The main ASPI has gained 9.9% 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 stock index has lost 30.4% so far this year after being one of the best stock markets in the world with a return of 80% last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led to the country being rated with a restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
The net inflow of foreigners was 74 million rupees on Tuesday, while the total net outflow of foreigners so far this year is 847 million rupees.
Investors are also concerned about the rupee’s sharp fall from 203 to 370 levels so far in 2022.
Aitken Spence, which pushed the ASPI, closed up 8.3% at 113.8 rupees per share, and Chevron Lubricants closed up 13.8% at
107.8 rupees per share, Lanka IOC then earned 5.7 to 138.8 rupees. (Colombo/08/09/2022)