India’s assurances on debt restructuring enliven share market

By Hiran H.Senewiratne

India on Monday formally notified IMF Managing Director Kristalina Georgieva that it would support Sri Lanka’s external debt restructuring program, thus creating some positive sentiment on the CSE yesterday, market analysts said.

Until June 2022, India’s outstanding credit to Sri Lanka amounted to US $ 1.68 billion or 12 per cent of the total. India was the third largest bilateral creditor to Sri Lanka after China and Japan. India happens to be the first of the major bilateral creditors to give financial assurances, which is key to Sri Lanka successfully pursuing restructuring of external debt worth US $ 46.6 billion, including US $ 14 billion in bilateral credit.

Shares edge up in mid-day trade yesterday as the market saw positive sentiments after President Ranil Wickremesinghe announced that discussions with lenders are successful, giving a long- awaited green light to investors, an analyst said.

“I can tell this assembly that the talks are successful. Very soon we will have an answer, President Wickremesinghe told parliament this week.

Shares that are gaining the interest by investors are life insurance counters and treasury counters, due to falling interest rates coming in through the decision by the Central Bank to limit the Standing Deposit Facilities (SDF).

Both indices moved upwards. The All- Share Price Index went up by 98.65 points and S and P SL-20 was up by 54.3 points. Turnover stood at Rs 1.86 billion with one crossing. The crossing was reported in JKH, which crossed 485,000 shares to the tune of Rs 96 million; its shares traded at Rs 136.

In the retail market top seven companies that mainly contributed to the turnover were, Hayleys Rs 262 million (3.7 million shares traded), Softlogic Capital Rs 179 million (11.6 million shares traded), First Capital Holdings Rs 153 million (4.2 million shares traded), Capital Alliance Rs 126.9 million (3.9 million shares traded), JKH Rs 117 million (861.000 shares traded), Softlogic Life Insurance Rs 93 million (871,000 shares traded) and First Capital Treasuries Rs 77.8 million (2.9 million shares traded). During the day 98 million share volumes changed hands in 18000 transactions.

During the day, Hayleys made a significant price gain. Its share price increased by Rs 6.30 or 10 per cent. Its shares shot up to Rs 70.60 from Rs 64.30.