Sri Lanka stocks fell on Wednesday (01) from a record closing high hit on the previous session as investors booked profits amid fears of a rupee depreciation amid speculation over the island nation seeking an IMF program to instill investor confidence, brokers said.
Central Bank Governor Ajith Nivard Cabraal last week said the IMF could ask the country to depreciate the rupee under its reform agenda if Sri Lanka goes to the global lender.
“Speculations regarding an IMF programme contributed to the fall today along with the CLC (Commercial Leasing and Finance Plc) mainly dragging the index down” a Colombo based broker said.
“Other than that the market was volatile throughout the day.”
All Share Price Index fell 0.27 percent or 30.65 points lower at 11,409.88.
The S and P SL20 index of the most liquid share rose 0.86 per cent or 33.38 points to close at 3,909.34.
Some stockbrokers said speculation over steep depreciation of the rupee has raised some concerns among foreign investors, who on Tuesday sold a net 55 million rupees worth of shares, extending the net foreign inflow to 49.6 billion rupees so far this year.
Sri Lanka’s President said over the weekend he will have to take a lot of unpopular decisions, which investors speculate could be a rupee depreciation.
A currency depreciation will help companies with export business to earn more profit in local currency.
With the new Omicron variant being identified and the fear of other businesses getting affected, more investors seemed to move for the health sector and export-oriented stocks, stockbrokers said.
The day’s turnover was 11 billion rupees above this year’s average daily turnover of 4 billion rupees.
The fall was led by Commercial Leasing and Finance Plc, LOLC Finance and Dialog Axiata.
Commercial Leasing and Finance Plc fell 7.75 percent to close at 61.90 rupees a share and LOLC Finance closed 5.69 percent down at 26.50 rupees a share.Dialog Axiata closed 1.79 percent down at 11.00 rupees a share.
Expolanka, the market heavyweight which has a significant component of export and freight business, gained 1.07 percent to close at 284.50 rupees a share.