Sri Lankan shares close at one-month low; telcoms lead

FIRST CAPITAL’S HEAD OF RESEARCH, DIMANTHA MATHEW, SPEAKS TO REUTERS

Sri Lankan shares on Friday hit their lowest close in more than a month, dragged down by telecom stocks, while investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.06 percent at 6,084.99, its lowest since Feb. 6. It shed 0.27 percent during the week, posting its third straight weekly decline.

Foreign investors were net buyers for the eighth straight session on Friday, purchasing shares worth 174.96 million rupees ($1.16 million), and extending the year-to-date net foreign inflow to 2.12 billion rupees worth of equities.

Turnover was 711 million rupees, more than this year’s daily average turnover of 690.1 million rupees.

“Foreigners are the only people active in the market these days as not a lot of activities are taking place,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“The market is slowly coming down with rising rates and economic uncertainty.”

Traders said there were concerns after the International Monetary Fund urged Sri Lanka’s central bank to be ready to tighten monetary policy if credit growth or inflation does not abate.

Shares of Dialog Axiata Plc dropped 0.89 percent, while Commercial Leasing and Fiance Plc plunged 10.71 percent and conglomerate John Keells Holdings dropped 0.14 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept the key policy rates on hold.

($1 = 151.2500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management,  retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.