ECONOMYNEXT – Shares in Sri Lanka gained for the seventh consecutive session on Friday (05), hitting a new high in more than two months as buyer 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 increased by 9.3% over the past seven sessions.
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.
“Whether we like it or not, we have to deal with the IMF. Above all, we have to conclude the stand-by agreement with the staff-level agreement with the IMF,” Wickremesinghe said during a keynote speech at an economic forum in Colombo.
“When we are dealing with the IMF, one of the biggest issues we have to deal with is the government
change and policies change. Are we ready to stand idly by, to support the deal?
Sri Lanka already declared sovereign debt default on April 12 this year and failed to pay its first
sovereign debt in May amid a worsening economic crisis which then turned into a political crisis and led to the change of president, cabinet and government.
He said the country should focus on external debt first and sail without getting caught
in the geopolitics of the Asian region.
The more liquid S&P SL20 index rose, closing 1.89% or 50.48 points higher at 2,728.14.
Sri Lanka is facing the worst energy and economic crisis of its post-independence era and the economy is
is expected to contract by 7% this year.
The main ASPI has gained 6.4% 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 best stock markets in the world with 80%
back 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
Restricted/selective default rating by rating agencies, which weighed on investor sentiment.
Net overseas sales were Rs 265 million while total overseas net outflows so far are Rs 858 million.
Investors are also concerned about the rupee’s sharp fall from 203 to 370 levels so far in 2022.
Hayleys, which pushed the ASPI, closed up 10.2% at 94.8 rupees per share, Melstacorp closed up 8.8% at
44.7 rupees per share, while LOLC gained 6.5% to 507 rupees. (Colombo/August 05, 2022)