ECONOMYNEXT – Sri Lanka shares closed at a two-week high on Tuesday continuing the positive trend for three sessions as investors speculated interest rates fall in line with the inflation and Expolanka’s expansion plans, brokers said.
The market witnessed a turnover of 2.8 billion rupees, slighty less than this year’s daily average turnover of 2.9 billion rupees. This is the highest turnover generated since October 11.
“Speculations on interest rates easing continued as investors expected yields from today’s bond auction to follow a similar trend as of the last T-Bill auction.,” First Capital Market Research said in it’s daily note.
Central bank governor said the market rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.
The main All Share Price Index (ASPI) closed 0.79 percent or 65.27 points higher at 8,375.21, highest index gain in since November 14.
Previously analysts said the market is moving in a bull-trap with short-lived buying and selling sentiments because investors are not confident in market sustainability.
In the past sessions, the index continued to fall on the speculation of a local debt restructuring although no proper decision has been taken so far.
State Minister for Finance Shehan Semasinghe told parliament during the budget debate on Wednesday that Sri Lanka will continue to pay its domestic loans and no local debt restructuring has been discussed.
The budget saw policies that will increase the cost of doing business across the board, but relieve the government from depending on excess money printing, analysts say.
The market saw a foreign inflow of 1 million rupees. The total net foreign inflow stood at 18.29 billion rupees so far for this year.
The more liquid index S&P SL20 closed 0.79 percent or 65.27 points higher at 2,640.31.
The ASPI has fallen 2.6 percent so far in November after losing 13.4 percent in October.
It has lost 31.5 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 pushed the index up to close at 3.98 percent to 189.5 rupees.
Other top gainers were Browns Investment gained 6.6 percent to close at 6.5 rupees and Melstacorp gained 4.4 percent to close at 47.7 rupees.(Colombo/Nov29/2022)