Rs 63 billion shareholder wealth wiped out

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Stocks fell for the third consecutive market day to yesterday, impacted by the triple evils of political uncertainty, socioeconomic instability and record high inflation, thereby making investors poorer by Rs 62.62 billion in the review period. A high inflationary environment makes the fixed income market more attractive to investors at the cost of the bourse. This week, Central Bank of Sri Lanka will be conducting two auctions for the sale of Rs 85 billion Treasury (T) Bills and Rs 50 billion T Bonds to the market.

Consequently turnover fell to a 12-day low of
Rs 693.91 million, ASPI to an eight day low of 7,630.17 points and the S&P SL 20 Index to an 11 day low of 2,418.71 points at the end of yesterday’s trading.  A turnover lower than that of yesterday was last made on 14 July with a figure of Rs 625.76 million, data showed. Meanwhile, the last time that the ASPI and the S&P SL 20 indices made lower values than those of yesterday were on 18 July and 15 July with figures of 7,536.61 and 2,400.17 points respectively, statistics showed. Subsequently, the bourse suffered a net foreign outflow (NFI) of Rs 20.9 million yesterday, increasing NFOs in the calendar year to date to Rs 699 million.     

“Spot” Unchanged

The benchmark, albeit administered market “spot” closed unchanged for the seventeenth 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 (YoY), thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy.

By Paneetha Ameresekere