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Tuesday, November 30, 2021

Sri Lankan shares fall to 4-month closing low on foreign selling

Sri Lankan shares fall to 4-month closing low on foreign sellingCOLOMBO: Sri Lankan shares fell for a third straight session on Wednesday and posted their lowest close in more than four months, as foreign investors sold diversified stocks such as conglomerate John Keells Holdings Plc and Aitken Spence Plc.

A weaker rupee, political uncertainty and the recent fuel price hike also weighed on sentiment, with investors mostly keeping to the sidelines awaiting cues about the real impact of the floods that hit the island nation over the past week, brokers said.

Foreign investors sold net 1.11 billion rupees worth of equities on Wednesday, turning the year-to-date foreign trade to a net outflow of 900.9 million rupees worth of shares.

The Colombo stock index ended 0.5 percent weaker at 6,420.98. It fell 0.4 percent last week.

Turnover was 1.7 billion rupees ($10.76 million) on Wednesday, well above this year’s daily average of 984.5 million rupees.

“Market came down on heavy foreign selling on John Keells,” said Dimantha Mathew, head of research, First Capital Holdings.

“Foreign investors are worried over the rupee depreciation. Currency depreciation is the major worry for foreigners in any country.”

Analysts said investors are waiting to see the full impact of the floods, which killed 24 people last week.

Shares of John Keells Holdings fell 2.2 percent, Aitken Spence and Company lost 8.1 percent, Sampath Bank Plc ended 1.7 percent weaker and Ceylon Tobacco Company Plc slipped 0.6 percent.

The rupee hit a fresh low of 158.50 per dollar on May 16 on importer demand for the US currency.

Analysts said market sentiment had been dented by concerns over political instability following President Maithripala Sirisena’s decision to suspend parliament last month after 16 legislators from his ruling coalition defected.

On May 8, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures.

Copyright Reuters, 2018
 

Source: Brecorder

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