The launching of mega infrastructure projects and improved tourist arrivals in the month of June compared to May in the aftermath of the April 21 Easter Sunday attacks lifted the spirits of the Colombo Stock Exchange (CSE) yesterday, sending the indices significantly upwards.
The benchmark All Share Price Index (ASPI) surged by 97.42 points or 1.8 percent to close at 5508.97 while more liquid S&P SL20 index closed 2587.84, up 45.54 points or 1.79 percent. Brokers said yesterday’s gain by ASPI was the highest since November 1, last year.
However, the bourse is down 8.98 percent so far this year.
The government on Wednesday flagged off the Japanese-funded US $2.2 billion light railway transit (LRT) project to ease the traffic congestion in Colombo and its key suburbs.
A few other mega infrastructure projects including the Central Expressway, elevated highway between the Kelaniya Bridge and Rajagiriya and the relocation of Manning market to Peliyagoda are also currently underway.
In addition, higher tourist arrivals in June over May and the Cabinet nod given for a US $ 50 million cable car project in Nuwara Eliya also lifted nvestor sentiment at the CSE yesterday, according to brokers.
They said May 31 policy interest rate cut by the Central Bank and the slapping of caps on bank deposits further added to the positive investor sentiment.
Also, the government last week announced a mini-stimulus programme worth almost Rs.40 billion by way of increasing public sector salaries and pensions. This is expected to spur aggregate demand in the currently dormant economy.
Meanwhile, the biggest gainers in the index yesterday were diversified and banking stocks. Shares in Distillers Company of Sri Lanka PLC rose 10.39 percent, while conglomerate John Keells Holdings PLC ended 1.54 percent stronger.
Foreigners sold on a net basis for 18 sessions in 19, selling a net Rs.3.5 million worth of shares yesterday and extending the year-to-date net foreign outflows to Rs.7.01 billion, the bourse data showed.
Stock market turnover yesterday was Rs.858.1 million, well above this year’s daily average of about Rs.545.9 million. Last year’s daily average was Rs.834 million.
According to Reuters, the rupee closed steady at 176.00/25 per dollar as banks’ dollar sales offset the importer greenback demand. The rupee rose 0.17 percent last week, and is up 3.75 percent so far this year.
The rupee dropped 16 percent in 2018 and was one of the worst-performing currencies in Asia.
The island nation raised US $2 billion via 5-year and 10-year sovereign bond sales last week, tapping global capital markets for the second time in three months.
Foreign investors bought a net Rs.2.26 billion worth of government securities during the week ended June 26, but the island nation’s net foreign outflow was at Rs.18.4 billion so far this year, Central Bank data showed.