Shares drop 3% after IMF warns on debt

Tuesday, 29 March 2022 01:49 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka shares tumbled 3% on Monday after a warning from the International Monetary Fund (IMF) that the country needed a strategy to make its debt sustainable.

The CSE All-Share index settled down 2.99% at 10,142.29 points, with industrial and financial stocks accounting for a majority of the losses.

Sri Lanka’s government bonds were down 1.5 to 2.2 cents on the dollar on Monday, as traders reacted to the IMF’s assessment published late on Friday that Sri Lanka was experiencing a combined balance of payments and sovereign debt crisis.

Sri Lanka has sought an additional credit line of $ 1 billion from India to import essentials amid its worst economic crisis in decades.

The country’s foreign exchange reserves have fallen 70% in the past two years to about $ 2.31 billion, leaving it struggling to pay for essential imports, including food and fuel.

Conglomerate Expolanka Holdings PLC was the top drag to the index, sliding 5.3%. Foreign investors were net buyers in the equity market, purchasing shares worth nearly Rs. 155.66 million. Domestic investors were net sellers, selling Rs. 2.10 billion worth of shares, exchange data showed. The equity market turnover was Rs. 2.13 billion.

Trading volume rose to 97.05 million shares from 95.33 million shares in the previous session.