ECONOMYNEXT – Sri Lanka shares closed at a month-long high on Wednesday, gaining for the fourth session after the government is in talks with the AfDB and World Bank to secure a $1.9 billion loan facility , brokers said.
The main All Share Price Index (ASPI) closed up 3.3% or 276.02 points at 8,651.23, the biggest index gain since November 1.
“Investor participation has improved with confirmed talks with multilateral and bilateral lenders, including global banks and AfDB for $1.9 billion following the conclusion of a board-level agreement on the IMF,” First Capital Market Research said in its daily note.
Former Central Bank Governor Indrajit Coomaraswamy told a forum on Monday that the government was in talks with the AfDB and the World Bank to secure loans of $1.9 billion after the approval of a reform program with the International Monetary Fund.
A policy loan currently being discussed with the World Bank could bring in around US$700 million, Coomaraswamy told a business forum hosted by CT CLSA Securities, a Colombo-based brokerage firm.
The Asian Development Bank could also give about US$1.2 billion, most of which will be budget support, he said.
The market recorded a turnover of 3.3 billion rupees, higher than this year’s average daily turnover of 2.9 billion rupees. This is the highest turnover generated since October 04.
In recent sessions, the market gained after the central bank governor said market rates should eventually ease despite fears of domestic debt restructuring as inflation falls, the liquidity increases in dollar markets and interbank liquidity improves.
Over the past few sessions, the index has continued to decline on speculation of a local debt restructuring although no proper decision has been taken so far.
The market saw a foreign inflow of Rs 39 million. The total net inflow of foreigners stood at 18.33 billion rupees so far for this year.
The more liquid S&P SL20 index closed up 3.4% or 89.78 points at 2,730.08.
ASPI fell 0.5% in November after losing 13.4% in October.
It has lost 29.2% since the start of the year after being one of the best stock markets in the world with a return of 80% last year when large volumes of money were printed.
Sampath Bank pushed the index up to close down 10.9% at 36.6 rupees.
Browns Investment also gained 15.4% to close at 7.5 rupees and LOLC gained 9.4% to close at 411.3 rupees. (Colombo/November 30/2022)