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Sri Lankan stocks closed at a record high on Friday. 2021 was their best year since 2010.
For the year, the CSE All-Share Index has seen a whopping 80.45% increase and was up 1.72% on the last day of 2021, reaching a record high of 12,226.01 points at the close of trading.
Sri Lanka’s stock market is booming, with USDINR rising for the first time in a fortnight.
Financial services provider Senkadagala Finance Plc, conglomerate Expolanka Holdings Plc and Lanka ORIX Leasing Company Plc were among the most profitable stocks in Sri Lanka this year.
Energy stocks were the main driver for the CSE index on Friday due to the news.
Thus, Sri Lanka’s energy minister said on Friday that the country would sign an agreement with the Indian Oil Corp. unit to rehabilitate 75 oil reservoirs as part of securing a $500 million fuel credit line from India.
Global rating agency Fitch downgraded Sri Lanka’s sovereign rating to junk stock amid a growing risk of default in 2022 earlier this month. However, the country’s central bank has assured that there will be a comfortable foreign exchange reserve position next year.
Traders seem to have decided to put their trust in the Sri Lankan central bank, at least on short positions, creating a stir in the regional market.
According to the stock exchange, the stock market had a turnover of 8.24 billion Sri Lankan rupees ($40.64 million) on the last trading day of the year. And trading volume in the securities rose to 858 million shares from 509.5 million shares in the previous session.
One should not think that only Asian investors are interested in this market. For instance, foreign investors were net sellers in the stock market, selling Rs 77.6 million worth of shares, the bourse data showed.
Notably, all this is happening amid the spread of the coronavirus within the country. So far, Sri Lanka has reported 586,746 cases of coronavirus and 14,962 deaths, as revealed by the country’s health bureau.
Nevertheless, residents are quite diligent about vaccination. According to Johns Hopkins University, about 63.48% of Sri Lanka’s population has been fully vaccinated. This is a high figure among Asian third-tier countries, which makes the Sri Lankan rupee look like an attractive currency for speculators with short positions. Long positions are still in question due to the pre-default state of the economy.
The Indian rupee is also expected to rise on energy news. USD/INR rises today for the first time in a fortnight.
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