ECONOMYNEXT – Sri Lanka’s stock exchange index closed steady on Tuesday (22) from a more than two-month low after it posted its worst fall in 16 months in the previous session  on margin calls and economic woes.

The main All Share Price Index (ASPI), closed 0.01 percent or 0.93 points up at 11,592.30 points.

The market opened lower and managed a significant recovery during the mid-day trade, almost gaining 100 points however the selling pressure returned and gains were surrendered.

“The gain seen during the day as a result of investors buying in at the bottom line,” s top analyst said.

“Buying came in heavy but the selling pressure does not seem to settle. It erased away today’s gain too but it did slow down.”

He said  the investors who have been holding on for a long period sold their shares when the opportunity came.

On Monday (21), ASPI lost 542 points to close at its lowest since since October 05, 2021.

This plunge saw the market index losing 5.9 percent so far this year and 10.2 percent so far for the month despite listed companies posting better than expected earnings in the December quarter.

Analysts on Monday said if the fuel shortage and power cuts continue, the market condition would worsen.

SL20 of the more liquid index closed 0.03 percent or 1.06 points up at 3,933.84.

Analysts had predicted a downtrend in the market due to the uncertainties in the market and the economy.

The day’s turnover was 2.8 billion rupees, less than half of this year’s average turnover of 6.8 billion rupees.

The market has been in a declining trend due to the ongoing forex crisis most companies are going through, despite many companies posting better-than-expected earnings in the December quarter.

The rupee exchange rate is fixed at around 200 rupees by the central bank, but it is now above 250 rupees per dollar in the grey market.

Foreign investors, who are highly worried about possible sharp depreciation or devaluation in the currency, bucked the trend and bought a net of 81.6 million rupees worth shares on Tuesday.

The foreign sales of shares so far this year have been 3.2 billion rupees. In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.

Analysts had predicted that the economic concerns would drag the market from time to time until the government finds a sustainable solution for the country’s looming debt crisis.

Vallibel One, Commercial Bank and Sampath Bank kept the market steady on Tuesday.

Vallibel One gained 4.96 percent to close at 71.90 rupees a share, while Commercial bank rose 1.21 percent to 81.00 rupees a share.

Sampath Bank rose 1.11 percent to close at 54.80 rupees.

Expolanka, the market heavyweight that has export and freight businesses gained 0.35 percent to 286.50 rupees a share.
(Colombo/Feb22/2022)