Several hour water cut in Sri Lanka capital
ECONOMYNEXT – Sri Lanka stocks gained for the second session for the week on Friday pushed by energy and plantation shares while the index gained 4.6% in the month, the data showed.
The main All Share Price Index (ASPI) edged up 0.67% or 51.51 points to 7,731.15 from its lowest since July 18.
Analysts said the bourse bounced back to the green territory as investors confidently rallied predominantly in the plantation shares while the president Ranil Wickremesinghe’s call to establish an all-party government boosted the sentiment.
The buying being driven by the energy sector LIOC because of the price formula and the government not having sufficient fuel.
Lack of fuel in state-run Ceylon Petroleum Corporation means the Lanka IOC, a subsidiary of Indian Oil Corporation (IOC), can increase its sales volume and that can lead to higher profits, analysts said.
Others said the plantation and LIOC shares were up because of better earning expectations in the June quarter.
The more liquid S&P SL20 index gained, closing at 0.76% or 18.48 points higher at 2,448.36.
Sri Lanka is facing its worst fuel and economic crisis in its post-independent era and the economy is expected to contract between 8-10% this year.
The turnover was 1.5 billion rupees, around a third of this year’s average daily turnover of 3.06 billion rupees.
The main ASPI has gained 4.6% in July so far after falling 9.3% in June, reversing a 6% gain in May. It lost 23% in April followed by a 14.5% fall in March.
The market has lost 36.7% so far this year after being one of the world’s best stock markets with an 80% return last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.
Richard Pieris leading the ASPI’s gain, closed 8.6% up at 19.00 rupees a share, Namunukula Plantation closed 24.9% up at 473.25 rupees a share, while Lanka IOC (LIOC) closed 6.1% up at 90.1 rupees. (Colombo/July 29/2022)