Stock market ends near 4-week low
COLOMBO: Sri Lanka stocks closed near four weeks’ low as concerns over a drag in the IMF deal and delay in the local government election weakened the investor sentiment, analysts said.
Sri Lanka’s main share index closed lower on Tuesday to its more than four-week low with continues to take a waiting approach due concerns over securing the International Monetary Fund (IMF) loan, analysts say.
All Share Price Index (ASPI) fell 1.73 percent or 147.76 points to 8,790.72, its lowest since January 20 and the bourse saw foreign outflow on a net basis for the first time since January 25.
“It was further affected with the government postponing the postal elections” an analyst said.
Postal voting for the March 9 Local Government polls was postponed due to reasons beyond the control of the Election Commission (EC), the EC said, in a likely move that could delay the election in which the ruling party is facing a possible defeat.
“All preparation was done to issue a postal voting card on February 15 in parallel to the LG polls that are scheduled for March 09,2023,” the EC said in a statement.
Net foreign earnings were 468.3 million rupees on Tuesday. However, they have bought a net 4.1 billion worth of shares so far this year.
Sri Lanka still needs assurances from China for the IMF loan approval from the global lender’s Board. The loan was originally expected in December last year, but now it is expected in the second quarter, government officials who are aware of debt restructuring say.
The island nation’s main business body, Ceylon Chamber of Commerce, has urged the IMF to proceed with the re-structuring undertakings already given by India and the Paris Club while requesting China for full assurances.
India and the Paris Club has given specific assurances to re-structure the sovereign debt defaulted Sri Lanka’s external borrowing. China has offered a two year moratorium and re-structure debt during that time, but some countries including the United States have asked China to specific assurances.
The most liquid index S&P SL20 closed down at 1.72 percent or 46.37 points to 2,648.99.
The market saw a turnover of 2.2 billion rupees today, higher than this year’s daily average of 1.8 billion rupees, and slightly down from the 2022 average turnover of 2.9 billion rupees.
Top losers were Commercial Bank, Softlogic Life Insurance and Lanka IOC. (Colombo/Feb14/2023)