The week started yesterday with world oil prices spiking to $ 140 a barrel in early Asian trading that sent most Asian markets down by more than 2% by mid day in the regions and that’s when our market opened.After last week’s unusual interest rate hike of 100 basis points the market ended positively on Friday with an expectation of a devaluation over the weekend. Market opened positively though the global scenario was bleak in the region and was up around 80 points whithin the first hour , indicating that the devaluation announcement by CBSL would come whithin the day , however when there was no even by noon the market seemed to lose hope and started weakening initially sliding towards Fridays close by around mid afternoon past 1 pm and then accelerated towards a 300 point drop in the last half hour of trading with seasoned investors picking up the bargains that were coming in from margin accounts who preferred to unwind even though there were no major margin calls. The fact that the official inflation has shot up to 15% and the actual rate of inflation being around 30% some have a mythical sense of safety by staying in cash at least temporarily. It must be noted that we are seeing very unusual times of tough economic situation in the country even before the world events in Ukraine, hence the situation is amplified now a few times more than it was two weeks ago. The inflationary pressure is not demand driven but rather a cost recovery based inflation coupled with shortages,hence it is prudent to hold or shift your funds to dollar earning companies or counters with large real estate portfolios or manufacturing sector leaders who easily pass on costs to the consumer with no big erosion of it’s market share. The ASP dropped
283 possible points to close 2.52% lower at 10960 and the S&P SL20 closed down 2.75% and 105 points lower to close at 3714 points
Today the market is expected to have more possitive outcome with the $ devaluation that ultimately got announced late in the night by CBSL .
