Rs 45 billion worth of shareholder wealth was wiped out yesterday by panicky exits due to President Ranil Wickremesinghe’s blunderbuss handling of peaceful “Aragalaya” protesters at Galle Face and at the Presidential Secretariat on Friday.
Consequently the ASPI and the S&P SL 209 indices fell to a seven-day low, with the former declining by 1.07 per cent to 7,639.42 and the latter by 1.13 per cent to 2,434.28 points; yesterday over Friday’s close. Figures lower than this last took place on 18 July, with values of 7,536.61 and 2,423.08 points, respectively. Yesterday also recorded the ASPI’s second consecutive market day’s fall.
Turnover made yesterday was Rs 744.86 million; the second consecutive market day to yesterday that turnover made was under Rs one billion. Turnover made on Friday was Rs 866.64 million. The bourse however enjoyed net foreign inflows (NFIs) for the eighth consecutive market day to yesterday, last seen three months ago. Yesterday’s NFI was a nominal Rs 2.8 million, thereby reducing NFOs in the calendar year to date to Rs 678.1 million. The last time the bourse enjoyed NFIs for eight consecutive market days was from 4 April to 27 April.
The benchmark, albeit administered market “spot” closed unchanged for the sixteenth consecutive market day at Rs 360/364 to the US dollar in two way quotes yesterday, down by between 78.22-79.31 per cent (Rs 158-161) year on year, thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy, they said.
Inflationary Money Up Rs 19B
Government of Sri Lanka’s demand pull inflationary face value money printing (FVMP) debt increased by
Rs 18,709.48 million and on the whole its FVMP debt increased by 0.63 per cent (Rs 19,676.74 million) to Rs 3,145, 995.21 million (Rs 3.1460 trillion) due to a perennial lack of revenue on Friday. GoSL’s FVMP debt has been over Rs three trillion for a record consecutive 12 market days to Friday.
The country’s foreign reserves were drained by US$ 2.67 million (Rs 967.26 million) on Friday led by the settlements made in respect of payments made for essential imports on Friday. Conversions are based on the administered “spot” value of Rs 361.87 to the dollar as at Wednesday. Such commitments drained the country’s foreign reserves by a total of $ 154.73 million last month, data showed. CBSL lacks transparency in its open market operations.
GoSL’s at least theoretical MP borrowing costs relative to the increase in its FVMP debt accelerated by 4.47 per cent (Rs 6,169.77 million) to Rs 144,071.74 million on Friday due to selling pressure of Treasury (T) Bills and T-Bonds in secondary market trading to reinvest in tomorrow’s Rs 85 billion T-Bill auction on expectations of higher yields due to inflation running at a record 58.9 per cent last month. High inflation is an impetus for higher yields to counter high inflation.
Consequently market was short for a record 214 market days to Friday, with this shortfall increasing by 3.61 per cent (Rs 20,644 million) to 591,748million, thereby causing perpetual rate pressure. GoSL’s highest to the 217th highest FVMP debt has been registered for a record 217 market days to Friday.