Market falls to Covid lows

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The bourse (ASPI) fell to a near 19-month low and the S&P SL 20 Index which tracks good stocks to a near 29-month low, driven by the twin evils of sustained uncertainty coupled with the expectations that today’s Monetary Board meeting will see a sharp rise in policy rates in a bid to beat inflation which is at a near-100 per cent. Consequently, the market fell for the second consecutive market day to yesterday, with the ASPI declining by 120.96 points (1.64 per cent) to 7,238.59 points and the S&P SL 20 Index by 2.21 per cent (51.84 points) to 2,293.24 points. Figures lower than this last took place during the height of the Covid-19 pandemic, where the ASPI returned a figure of 6,774.22 points on 31 December 2020 and the S&P SL 20 Index 2,205.97 points on 13 March 2020.

Subsequently, shareholder wealth wiped out in the two market days to yesterday amounted to Rs 98.28 billion, while the ASPI and the S&P SL 20 indices have fallen by 218.89 points (2.94 per cent) and 87.02 points.

Meanwhile, turnover made yesterday was Rs 916.27 million on a 52.56 million share volume. However, the bourse enjoyed a pyrrhic net foreign inflow for the second consecutive market day to yesterday, with yesterday’s figure being Rs 20.63 million, though in the calendar year to date it has suffered a net foreign outflow of Rs 1.29 billion. 

‘Spot’ Unchanged at Rs 360/364, 3rd Day

The benchmark, albeit administered market ‘spot’ closed  yesterday to be trading unchanged for the third consecutive market day at Rs 360/364 to the US dollar in two-way quotes, market sources told Finance Today. 

Year-on-Year (YoY) to yesterday the administered market ‘spot’ was down by between 78.22-79.31 per cent (Rs 158-161), thereby causing cost-push inflationary pressure, as Sri Lanka is an import-dependent economy, sources said.

In like developments, the administered ‘spot’ for official purposes, such as for trades involving Central Bank of Sri Lanka (CBSL), Government of Sri Lanka (GoSL) and/or CBSL, GoSL and the market, YoY to yesterday has depreciated by 79.98 per cent (Rs 159.88).

Yesterday, the value of this official administered ‘spot’ was fixed at Rs 359.79 to the dollar, while a year ago it was Rs 199.91. Meanwhile, the straitjacketed, inflexible administered market ‘spot’ a year ago was fixed at Rs 202/203 to the dollar in two-way quotes. ‘Spot’ trades are settled after two market days from the date of transaction. CBSL, the steward of GoSL debt and of its foreign reserves also deals in ‘spot.’

By Paneetha Ameresekere