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ECONOMYNEXT – Sri Lanka inventory market closed weaker on Thursday (26) for the third consecutive session as some traders shifted their funds to fastened property whereas others stayed on the sidelines amid fears of tax hikes within the close to future after Prime Minister Ranil Wickremesinghe was appointed as the brand new finance minister, sellers mentioned.
“We noticed promoting strain beginning to enter the market whereas traders stayed on the sidelines as information of the brand new finances retains coming,” a high market analyst mentioned.
He expects the downward development to speed up within the subsequent two weeks.
One other analysts mentioned some traders are shifting their funds to fastened property like authorities securities that are giving round 24 p.c annual return.
Wickremesinghe was appointed as the brand new finance minister on Wednesday (25). He has promised to current a brand new finances quickly and mentioned the finances deficit for this 12 months might be as excessive as 13 p.c of the GDP, which is the very best since 1982.
The All Share Worth Index (ASPI) closed 0.6 p.c or 50.58 factors down at 8,319.58.
Gas hike, which is a deterrent to the financial progress, additionally weighed on the sentiment.
Added to the troubles, the central financial institution governor’s touch upon the nation’s progress contracting to file ranges as a result of financial disaster additionally dented the sentiment.
Probably the most liquid index S&P SL20 fell 1.28 p.c or 35.49 factors to 2,744.54.
The day’s turnover was 1.62 billion rupees, lower than a half this 12 months’s common every day turnover of 4.0 billion rupees.
Sri Lanka’s sovereign default has already led it to restricted/selective default ranking by ranking companies. The 84.5 billion financial system has already suspended overseas debt funds because it had run out of {dollars}.
Traders are additionally involved over the steep fall within the rupee, which has fallen over 80 p.c because it was allowed flexibility on March 7.
The market has gained 9.1 p.c in Could up to now following a lack of 23 p.c in April and 14.5 p.c in March.
The market has misplaced 31.9 p.c up to now this 12 months after being one of many world’s greatest inventory markets with an 80 p.c return final 12 months.
Overseas traders bought a internet 47.1 million rupees price of shares. The market has witnessed a complete overseas outflow of 1.2 billion rupees up to now this 12 months.
The ASPI was dragged down primarily by Expolanka, which fell 2.5 p.c to 223 rupees a share. Along with that, Sampath Financial institution fell 2 p.c to 38.40 rupees a share whereas John Keells Holdings slipped 1.3 p.c to 129 rupees a share (Colombo/May26/2022)
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