Lanka shares fall for seventh session

COLOMBO: Sri Lanka shares fell for the seventh session as investors awaited direction on the economic front, brokers said.

The main All Share Price Index (ASPI) closed 0.20 percent or 17.17 points lower at 8,379.95.

“The bourse continued to descend and closed the week marginally down as investors continued to remain sidelined waiting for a clear direction on the macroeconomic front,” First Capital Market Research said.

Sri Lanka’s sovereign bondholders are not likely to agree to any deal without domestic debt re-structuring, a media report said, though the island’s authorities are trying to avoid a second domestic restructuring with rupee debt already hit by depreciation and inflation.

Sri Lanka authorities have said a domestic debt re-structure would endanger banks that have already suffered a hit on their capital.

The more liquid index S&P SL20 closed 0.72 percent or 19.10 points lower at 2,623.70.

The market witnessed a turnover of 1.1 billion rupees, half of this year’s daily average turnover of 2.9 billion rupees.

The market saw a net foreign inflow of 39 million rupees. The total net foreign inflow stood at 31 billion rupees so far for this year.

The Paris Club group of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s prevailing currency crisis.

The government is in discussions with Asian Development Bank (ADB) and World Bank to get loans of 1.9 billion US dollars after a reform program with the International Monetary Fund is approved.

A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.

The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.

So far in December ASPI has lost 3.1 percent.

The ASPI gained 0.5 percent in November after losing 13.4 percent in October.

It has lost 31.4 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Expolanka pulled the index down to close at 5.2 percent lower at 183 rupees.

Lanka IOC fell 1.7 percent to close at 204.8 rupees and Richard Pieris closed 2 percent lower at 23.5 rupees a share.