ECONOMYNEXT – Sri Lankan stocks gained for the second session of the week on Friday, driven by energy and plantation stocks, while the index gained 4.6% during 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 stock market rebounded into green territory as investors rallied confidently mainly into plantation stocks while President Ranil Wickremesinghe’s call for a multi-party government boosted sentiment.
The purchases being driven by the LIOC energy sector due to the price formula and the fact that the government does not have enough fuel.
The lack of fuel in state-owned Ceylon Petroleum Corporation means that Lanka IOC, a subsidiary of Indian Oil Corporation (IOC), can increase its sales volume and this may lead to higher profits, analysts said.
Others said Plantation and LIOC shares were up on better earnings expectations in the June quarter.
The more liquid S&P SL20 index gained, closing 0.76% or 18.48 points higher at 2,448.36.
Sri Lanka is facing its worst energy and economic crisis in its post-independence era and the economy is expected to shrink by 8-10% this year.
Turnover was 1.5 billion rupees, about a third of that 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 drop of 14.5% in March.
The market has lost 36.7% so far this year after being one of the best stock markets in the world with a return of 80% last year when large volumes of money were printed.
Sri Lanka’s sovereign debt default on April 12 has already led to the country being rated with a restricted/selective default rating by rating agencies, which has weighed on investor sentiment.
Investors are also concerned about the rupee’s sharp fall from 203 to 370 levels so far in 2022.
Richard Pieris led the ASPI gain, closed up 8.6% at 19.00 rupees per share, Namunukula Plantation closed up 24.9% at 473.25 rupees per share, while Lanka IOC (LIOC) closed up 6.1% at 90.1 rupees. (Colombo/July 29, 2022)