Sri Lankan shares ended higher on Friday, hitting a record peak in the session and notching their best week in nearly a year, aided by a surge in industrial stocks and sustained buying from domestic investors.
The CSE All-Share index closed 0.85% higher at 13,280.94, its eighth straight day of gains. The index is up 8.6% already in 2022, after an 80% surge last year.
A combination of lack of avenues to invest in, inflation, and companies reporting better numbers due to import curbs sapping foreign competition is driving the rally, said Abhijit Kukreja, senior vice president for emerging markets equities at New York-based brokerage Auerbach Grayson.
Kukreja added that the rally was driven by local investors. "Foreign investors were heading for the door so they could get their money back because dollars were getting short."
Sri Lanka is facing its worst financial crisis in decades with foreign exchange reserves dwindling and debt repayments looming.
Sri Lankan shares register new closing peaks, industrials shine
On Friday, domestic investors were net buyers and snapped up shares worth 11.48 billion rupees ($56.62 million), while foreign investors were net sellers, exchange data showed.
The equity market's turnover was 11.64 billion rupees.
It is deceiving to think that the market is "blockbuster", Kukreja added, pointing to gains mostly coming from Expolanka and LOLC, while the traditional top gainers in which foreign investors had holdings were largely flat.
Logistics firm Expolanka soared nearly 1,200% in 2021, while conglomerate LOLC surged 760%.
On Friday, conglomerate Vallibel One led the rally with gains of 15.2%.
Meanwhile, Sri Lanka signed a deal with Indian Oil Corp's local unit to lease 75 oil tanks, as the island moved closer to securing a $500 million fuel credit line from India.
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