Dollar Power Brings Down Bourse, 2nd Day


The power of the US dollar to dollar starved Sri Lanka paradoxically brought down the Bourse for the second consecutive market day to yesterday.

This is because the Bourse nowadays is a market for dollar investors, who, ipso facto, command prices at their whim and fancy for a dollar starved economy like Sri Lanka, therewith having the power to buy stocks at a bargain, consequently bringing down the bourse.

Yesterday’s net foreign inflow (NFI) amounted to a miserly US$ 213,651 (Rs 77,119,565) and on the previous day Tuesday, $ 378.899 (Rs 136,771,301), commensurately bringing down the Bourse by  1.15 and 1.97 per cent, respectively, after previously gaining for 12 market days to Monday. The Bourse previously suffered net foreign outflows (NFOs) for three consecutive market days to Monday (15 August). Meanwhile, the Bourse, in the calendar year to yesterday has suffered a total of Rs 1,302.3 million in NFOs due to sustained uncertainty.

In related developments, the Bourse, in the two consecutive market days to yesterday has fallen by 284.17 points (3.09 per cent) to 8,907.35 points and the S&P SL 20 Index by 150.3 points (4.85 per cent) to 2,947.90 points on a Rs 3.77 billion turnover and on a 129.13 million share volume.

Consequently, market capitalisation fell under the Rs four trillion mark after a lapse of two market days to Rs 3.92 trillion, while the market fell to a seven calendar day low, yesterday. However, another consolation was that the bourse for the ninth consecutive market day to yesterday  made a daily turnover of over Rs three billion.

‘Spot’ Unchanged 32nd Day

The benchmark, albeit administered market ‘spot’ closed unchanged for the thirty second consecutive market day at Rs 360/364 to the US dollar in two way quotes to yesterday (Wednesday 17 August), market sources told Finance Today.

Yesterday, the administered market ‘spot’ was 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.

By Paneetha  Ameresekere