The Colombo Stock Exchange ended the week of May 19-23 with the All Share Price Index down 4.26 percent, shedding roughly 976 points despite a third straight session of gains on Friday, Daily FT reported. The more liquid S&P SL20 fell 3.55 percent over the week.
The market closed Friday with the ASPI up 0.44 percent at 21,929.64 and the SL20 up 0.37 percent at 6,061.02, recovering some of the heavy losses recorded earlier in the week as the rupee slid to Rs.342-350 against the dollar at commercial bank counters before partially recovering. Weekly turnover totalled around Rs.2.2 billion.
Foreign investors were net sellers on the week, offloading shares worth approximately Rs.11.6 million net of purchases. Brokers said sentiment was subdued throughout the week as exchange-rate volatility, rising fuel-import costs from Middle East tensions and uncertainty over the timing of the rupee’s stabilisation prompted profit-taking by both retail and institutional investors.
The CSE retreat extends a softer phase for the market that began mid-May as the rupee depreciated against the US dollar at commercial banks. The Friday recovery was attributed by brokers to forward sales by exporters and a sharper-than-expected pullback in the spot rate to Rs.329, alongside Central Bank engagement with forex dealers on tighter market regulation.
Attention now turns to the IMF Executive Board’s May 27 review of Sri Lanka, which is expected to release a USD 700 million tranche under the country’s USD 2.9 billion Extended Fund Facility. A clean board outcome is widely seen as a near-term support for the rupee and listed equities.
Source: Daily FT.
