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Wednesday, May 25, 2022

Sri Lankan shares extend fall to near 15-month closing low

Sri Lankan shares extend fall to near 15-month closing low

COLOMBO: Sri Lankan shares declined for a fourth straight session on Thursday and posted their lowest close in nearly 15 months, as foreign investors continued to offload the island nation’s risky assets, while month-end settlements also weighed on the bourse.

The Colombo stock index ended 0.11 percent weaker at 6,181.48, its lowest close since April 4, 2017.

“Foreign selling has not stopped yet which is pushing the market down,” said Dimantha Mathew, head of research, First Capital Holdings.

“Today we saw some foreign buying and that absorbed the selling pressure to some extent. Margin calls are also there.”

Foreign investors net sold equities worth 196.1 million rupees ($1.24 million), extending the year-to-date foreign outflows to 1.2 billion rupees this year.

Turnover was 1.3 billion rupees, more than this year’s daily average of 934.9 million rupees.

Shares of Cargills (Ceylon) Plc fell 4.4 percent, conglomerate John Keells Holdings Plc ended 0.7 percent weaker, Bukit Darah Plc declined 3.7 percent and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, slipped 0.7 percent.

Finance Minister Mangala Samaraweera said last week the economy was likely to grow about 4.5 percent this year, below a central bank estimate of 5 percent.

The International Monetary Fund (IMF) said on June 20 Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.

Ratings agency Moody’s said on Wednesday a strengthening U.S. dollar since mid-April has increased the credit risk of several emerging markets, including Sri Lanka, due to currency depreciation.

Moody’s said a strong dollar would also lead to a drop in foreign exchange reserves of countries such as Argentina, Ghana, Mongolia, Pakistan, Sri Lanka, Turkey, and Zambia.

Sri Lankan markets were closed on Wednesday for a public holiday.

Copyright Reuters, 2018

Source: Brecorder

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