Sri Lankan shares fall for 3rd session; blue-chips down

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

Sri Lankan shares hit a one-week closing low on Monday, as investors sold shares of blue chip firms such as Ceylon Tobacco Company Plc and John Keells Holdings Plc amid concerns over rising market interest rates.

The Colombo stock index fell 0.33 percent to 6,139.51, slipping for a third straight session to its lowest close since Feb. 13.

“Blue-chips brought the market down. The profit-taking is still continuing and investors are more on a wait and see approach,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“The buying interest is there, but at a lower level. So investors are waiting to buy at cheaper rates.”

Shares of Ceylon Tobacco Company Plc fell 1.83 percent, while conglomerate John Keells Holdings Plc dropped 1.22 percent.

Turnover stood at 728.9 million rupees ($4.83 million), more than this year’s daily average of 625.5 million rupees.

Foreign investors offloaded a net 34.88 million rupees worth of equities on Monday, extending the year-to-date net foreign outflow to 272.7 million rupees worth of shares.

The market will remain slow for the next few days and many investors will wait for directions from a sovereign bond issue, Mathew said.

The Sri Lankan cabinet last week approved a $1.5 billion sovereign bond issue to repay loans and manage interest payments.

Yields on treasury bills are hovering at a more than four-year high.

($1 = 150.8300 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.