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HomeSri Lanka NewsSri Lanka shares droop to one-month low; foreigners exit after PM’s cautioning

Sri Lanka shares droop to one-month low; foreigners exit after PM’s cautioning


ECONOMYNEXT – Sri Lanka shares slipped 2.21 p.c on Tuesday (7) to its lowest shut in a single month as considerations over Prime Minister Ranil Wickremesinghe’s parliament cautioned on additional gas worth hike amid gas and fuel shortages within the subsequent three weeks dented investor sentiment, brokers stated.

Overseas buyers bought a web 112 million rupees’ value of shares on Tuesday. The market has witnessed a complete international outflow of 1 billion rupees to this point this yr.

Prime Minister Wickremesinghe on Tuesday stated the following three weeks shall be powerful  for Sri Lanka with gas and cooking fuel shortages at a “very troublesome” low, with the federal government not ruling out the potential for a ration system.

“Let’s restrict our travels these three weeks as a lot as doable. I additionally urge all residents to chorus from hoarding gas and fuel throughout this era,” he stated.

“On the finish of those three troublesome weeks, we will attempt to provide gas and fuel with out disruptions. Negotiations are underway with varied events to make sure this,” he added.

The All Share Value Index (ASPI) closed 2.21 p.c or 251.16 factors weaker at 7,631.13, its lowest shut since Might 9.

“Market is transferring on the identical weak sentiments however it’s making pushed on the fears of a worth hike,” a prime market analyst stated.

Beforehand, analysts stated that the uncertainties on the twenty first Modification, funds and the IMF discussions had been dampening the investor sentiments.

“Bourse closed within the crimson with buyers reserving earnings over the cautionary feedback made by the PM, urging to make use of gas and LP fuel sparingly whereas the federal government rectifies shortages in the identical. Furthermore, PM commented on a possible meals scarcity, including to the woes,” First Capital Market Analysis stated in its market observe.

The extra liquid S&P SL20 index fell 3.33 p.c or 172.48 factors to 2,631.13.

Prime Minister Wickramasinghe has already carried out a raft of tax hikes for imports whereas the nation can also be experiencing record-high gas costs. He additionally raised the value-added tax (VAT) to 12 p.c from 8 p.c this week.

Although increased taxes are good for state funds and an IMF deal, however they are going to hit earnings.

The market has to this point misplaced 5.8 p.c in June after gaining 6 p.c in Might. It misplaced 23 p.c in April and 14.5 p.c in March.

The market has misplaced 37.5 p.c to this point this yr after being one of many world’s greatest inventory markets with an 80 p.c return final yr when giant volumes of cash had been printed.

The day by day market turnover was 1.9 billion rupees, round a half of this yr’s common day by day turnover of three.8 billion rupees.

Sri Lanka’s sovereign default has already led it to restricted/selective default ranking by ranking companies and weighed on investor sentiment.

Traders are additionally involved over the steep fall of the rupee from 200 to 370 ranges to this point in 2022.

All Share Value Index was primarily dragged down by LOLC Holdings, which fell 11.2 p.c to 464 rupees a share.

Expolanka fell 6.1 p.c to 180.7 rupees a share. Ceylon Tobacco Firm misplaced 6.4 p.c to 600 rupees a share.. (Colombo/Jun07/2022)

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