Sri Lanka’s stock market gained marginally on Friday (21) as hopes of better earnings in December quarter helped investors to shrug off the central bank’s monetary policy rate hike on the previous day, brokers said.
The central bank on Thursday raised its key policy rates by 50 basis points and the move is expected to increase banks’ deposit rates and returns in fixed assets, though it was not strong enough to curb depreciation pressure on the local rupee currency, analysts say.
The main All Share Price Index (ASPI) closed 0.08 percent or 10.44 points higher on Friday to close at 13,371.61 points.
“Bourse managed to wrap-up the week stepping into the green region after ending a choppy trading session. ASPI initiated the day with a high beat but couldn’t hold on to the position as the uncertainty began to dominate the market, tumbling down the index during the first half of trading while displaying a significant level of volatility,” FirstCapital market research said.
“However, index managed to revert to an upward momentum in the final hour of trading as bargain hunters came to light pushing the prices higher..”
S&P SL20 of the more liquid index gained 0.16 percent or 7.49 points to 4,612.29.
Analysts said investors are worried about possible currency depreciation, government’s ability to avert a sovereign debt default, and fuel shortages hitting factory manufacturing and thus hitting future earnings.
Foreign investors, who are highly worried about possible sharp depreciation or devaluation in the currency, sold a net of 46 million rupees, extending the foreign selling of 2.1 billion rupees so far this year. In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.
Along with raising the policy rates, the central bank also announced moves to increase dollar liquidity through mandating registered tourist hotels to charge foreigners only in foreign currency and extending the incentive scheme for remittances.
An analyst said the rate hike will not the impact the market, as fixed deposit rates are still below 10 percent coupled with the negative interest rates.
Despite expected better earrings in the December quarter, lingering currency depreciation concerns had weighed on the foreign investor sentiment.Listed firms have started to release corporate earnings from this week.
The day’s turnover of 4.9 billion rupees, lowest in near four weeks and less than this year’s daily average of 7.6 billion rupees.
The Colombo Stock Exchange in a statement said the ASPI it is revising the index calculation methodology of the All-Share Price Index (ASPI) from full market capitalization-weighting to public float-adjusted Market Capitalization with effect from Monday (24).
The move is expected to reduce the volatility in the index.
On Friday Expolanka Holdings, Asiri Holdings, and Carson Cumberbatch helped to push the index up.
Expolanka, the market heavyweight which has export and freight businesses, closed 1.30 percent higher at 391.00 rupees a share, Asiri Hospitals closed 8.28 percent up at 47.10 rupees a share, and Carson Cumberbatch gained 6.31 percent at 320.00 rupees a share.
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The central bank on Thursday raised its key policy rates by 50 basis points and the move is expected to increase banks’ deposit rates and returns in fixed assets, though it was not strong enough to curb depreciation pressure on the local rupee currency, analysts say.
The main All Share Price Index (ASPI) closed 0.08 percent or 10.44 points higher on Friday to close at 13,371.61 points.
“Bourse managed to wrap-up the week stepping into the green region after ending a choppy trading session. ASPI initiated the day with a high beat but couldn’t hold on to the position as the uncertainty began to dominate the market, tumbling down the index during the first half of trading while displaying a significant level of volatility,” FirstCapital market research said.
“However, index managed to revert to an upward momentum in the final hour of trading as bargain hunters came to light pushing the prices higher..”
S&P SL20 of the more liquid index gained 0.16 percent or 7.49 points to 4,612.29.
Analysts said investors are worried about possible currency depreciation, government’s ability to avert a sovereign debt default, and fuel shortages hitting factory manufacturing and thus hitting future earnings.
Foreign investors, who are highly worried about possible sharp depreciation or devaluation in the currency, sold a net of 46 million rupees, extending the foreign selling of 2.1 billion rupees so far this year. In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.
Along with raising the policy rates, the central bank also announced moves to increase dollar liquidity through mandating registered tourist hotels to charge foreigners only in foreign currency and extending the incentive scheme for remittances.
An analyst said the rate hike will not the impact the market, as fixed deposit rates are still below 10 percent coupled with the negative interest rates.
Despite expected better earrings in the December quarter, lingering currency depreciation concerns had weighed on the foreign investor sentiment.Listed firms have started to release corporate earnings from this week.
The day’s turnover of 4.9 billion rupees, lowest in near four weeks and less than this year’s daily average of 7.6 billion rupees.
The Colombo Stock Exchange in a statement said the ASPI it is revising the index calculation methodology of the All-Share Price Index (ASPI) from full market capitalization-weighting to public float-adjusted Market Capitalization with effect from Monday (24).
The move is expected to reduce the volatility in the index.
On Friday Expolanka Holdings, Asiri Holdings, and Carson Cumberbatch helped to push the index up.
Expolanka, the market heavyweight which has export and freight businesses, closed 1.30 percent higher at 391.00 rupees a share, Asiri Hospitals closed 8.28 percent up at 47.10 rupees a share, and Carson Cumberbatch gained 6.31 percent at 320.00 rupees a share.
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