Investment in Sri Lanka

Sri Lankan shares end lower; post 3rd straight weekly fall

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

August 4, 2017

COLOMBO, Aug 4 (Reuters) – Sri Lankan shares fell for a seventh straight session on Friday to their lowest closing level in more than 13 weeks, led by manufacturing and telecommunication stocks.

The Colombo stock index edged down 0.06 percent to 6,567.43, its lowest close since May 3. The bourse fell 1.48 percent for the week, its third straight weekly fall.

The index slipped 1.6 percent in July, but has risen about 6 percent this year as of close of trade on July 31.

Shares of conglomerate John Keells Holdings Plc dropped 0.6 percent, while Dialog Axiata Plc slipped 0.9 percent and Chevron Lubricants Lanka Plc fell 2.03 percent.

“There were lower market activities, as investors are waiting to see the direction of the market,” said Dimantha Mathew, head of research at First Capital Holdings.

Foreign investors net bought shares worth 80.6 million rupees (about $525,424) on Friday, extending their year-to-date net inflow to 26.5 billion rupees.

Turnover stood at 405.1 million rupees ($2.64 million), less than half this year’s daily average of around 893.3 million rupees.

Analysts however expect equities to gain due to a fall in the yields of government bonds.

Sri Lanka’s central bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth. Short-term treasury-bond yields fell between 41 basis points (bps) and 55 bps at a weekly auction on Wednesday.

In last week’s auction, the weighted average yield on a 59-month bond dropped by 99 bps, while that on an 118-month bond fell by 78 bps.

Sri Lanka’s stock and foreign exchange markets will remain closed on Monday for a Buddhist religious holiday. ($1 = 153.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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.<