Friday, 13 March 2015 20:53
COLOMBO: Sri Lankan shares fell for the 10th straight session on Friday to a five-week closing low, with the day’s turnover slumping to a one-year low, as investor worries over rising interest rates weighed on sentiment.
The main stock index ended 0.25 percent lower, or 17.82 points weaker, at 7,091.25, its lowest close since Feb. 5, extending the fall to 3.09 percent in the last ten sessions.
The day’s turnover stood at 265.9 million rupees ($ 2 million), the lowest since March. 21 last year and less than a fifth of this year’s daily average of 1.37 billion rupees. “Nothing is happening and there is no investor interest at all,” said Dimantha Mathew, manager, research at First Capital Equities (pvt) Ltd, adding investors are waiting for the rising interest rates to settle.
Stockbrokers also said most market participants were away due to a local annual cricket match in Colombo.
Dealers said the market was closely monitoring interest rates amid heavy government borrowing. Sri Lanka’s new government has borrowed more than $ 1 billion in four days through Thursday, which economists have blamed on poor revenue and higher expenditure.
The heavy borrowing has resulted in a spike in market interest rates. Yields on t-bills rose between 21 basis points and 38 basis points at a weekly auction on Wednesday with the 91-day t-bill yield rising to a 14-month high of 7.10 percent. Foreign investors were net buyers of 24.1 million rupees worth of shares, extending the year-to-date foreign inflow to 2.58 billion rupees.
Shares in leading fixed line telephone operator Sri Lanka Telecom Plc fell 2.77 percent while Bukit Darah Company fell 2.36 percent.
Copyright Reuters, 2015
