Bourse cheers Gota’s exit 2nd day

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The bourse continued to bask in the glory of President Gotabaya Rajapaksa’s resignation for the second consecutive market day to yesterday, with market indices hitting a 24-day high. Rajapaksa sent his resignation letter to Speaker Mahinda Yapa Abeywardana on Thursday (14 July). Complementing these developments, the benchmark ASPI increased by 218.37 points (2.98 per cent) to 7,536.61 points and the more sensitive S&P SL 20 Index by 85.86 points (3.67 per cent) to 2,423.08 points in the two market days to yesterday. The bourse made a Rs 1.41 billion turnover. Meanwhile, prior to yesterday, the last time market indices hit a higher figure than “this” was on 24 June 2022, with values of 7,651.19 points for the ASPI and 2,470.19 points for the S&P SL 20 Index, respectively. Subsequently shareholders were made richer by Rs 90.30 billion (2.84 per cent) to Rs 3.27 trillion in the two consecutive market days to yesterday. The market enjoyed a net foreign inflow (NFI) of Rs 123.25 million yesterday, thereby reducing net foreign outflows that the bourse has suffered in the calendar year to date to Rs 1.01 billion. Yesterday was the third consecutive market day that the bourse has enjoyed NFIs. Yesterday also saw 64.99 million shares change hands.

“Spot” Unchanged 11th Day

The benchmark, albeit administered market “spot” closed   yesterday (Monday 18 July, 2022) to be trading unchanged for the eleventh consecutive market day at Rs 360/364 to the US dollar in two way quotes, market sources told Finance Today

Nonetheless, 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. And the administered, official “spot” has weakened by 80.61 per cent (Rs 161.13) to Rs 361.03 to the dollar, YoY.

In related developments, during this period last year, where then too the administered, made worse by an inflexible market “spot” in operation, closed unchanged for the eighth consecutive market day to Friday 16 July 2021 at Rs 202/203 to the dollar in two way quotes.

However, currently, the band in which the “guided market ‘spot’” may currently operate is fixed at +/- three per cent of the officially administered “spot” value, where the latter is applicable for transactions involving the Government of Sri Lanka (GoSL), Central Bank of Sri Lanka (CBSL) and or between the GoSL and/or CBSL with the market, which was fixed at Rs 361.03 to the dollar yesterday. A year ago on Friday, 16 July 2021, the administered “spot’ for official purposes was fixed at Rs 199.90 to the dollar. “Spot” trades are settled after two market days from the date of transaction, CBSL, the steward of GoSL debt and of its foreign reserves, deals in “spot.”

By Paneetha Ameresekere