April 26, 2019 (LBO) – The stock market in Sri Lanka has remained steady following an initial 4% drop in the broader indices after the Easter Sunday terror attacks which have so far claimed over 250 lives.
In a surprising development, during the first week of trading since the market opened after the bombings, stocks saw a net foreign inflow of over Rs1.5bn (US$9mn). Analysts were surprised at how strong the market has held up considering the magnitude of the ISIS inspired global terror attack in Sri Lanka.
The country’s currency, The Sri Lanka Rupee (LKR), has also been relatively steady at Rs175/dollar. In a recent interview with CNBC, the Governor of the Central Bank of Sri Lanka (CBSL) Indrajit Coomaraswamy admitted to some intervention by the CBSL that has been used to stabilise the currency after the attacks.
During the week there was significant net foreign buying in stock market bellwether John Keells Holdings (JKH). JKH had been seeing consistent net foreign selling over the last few months, so the foreign buying may be an indication that sellers have already been washed out.
The city of Colombo remains unusually quiet, with curfew during the night making streets almost completely empty. Uncertainty continues to prevail as the government continues fine tuning its response to the security situation.
INTERVIEW: Sri Lanka’s central bank intervened ‘in the last couple of days’ in #FX market after Easter Sunday attacks, @CBSL Governor Indrajit Coomaraswamy tells me #EasterSundayAttacksSL $LKR pic.twitter.com/LOMME8TGL1
— Sri Jegarajah (@cnbcSri) April 25, 2019