Investment in Sri Lanka

Sri Lankan shares hit 4-1/2-month closing low

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

SEPTEMBER 6, 2017

COLOMBO, Sept 6 (Reuters) – Sri Lankan shares closed at their lowest in more than four months on Wednesday, with foreign investors selling risky assets in lacklustre trade, while the daily turnover got a boost from block trades.

The Colombo stock index resumed trade after a holiday, ended down 0.38 percent at 6,361.03, its lowest close since April 17.

The country’s stock and foreign exchange markets were closed on Friday and Tuesday for religious holidays.

The bourse ended 0.3 percent lower last week, its seventh straight weekly fall. As of Wednesday’s close, it has shed more than 4.6 percent since July 27.

Shares of Sri Lanka Telecom Plc ended 3.3 percent down, while Trans Asia Hotel Plc closed 9.4 percent lower and the biggest-listed lender Commercial Bank of Ceylon Plc ended 0.4 percent weaker.

Foreign investors net sold 263.8 million Sri Lankan rupees ($1.73 million) worth of shares, but they have net bought 27.4 billion rupees worth equities so far this year.

“Another slow day. Investors are looking for direction and staying away,” said Dimantha Mathew, head of research, First Capital Holdings.

Mathew said investors are waiting to see the clarity on taxes following the Inland Revenue Bill.

The bill, Sri Lanka’s major tax reform since independence from Britain in 1948, seeks to expand the tax net and stamp out evasion. It is expected to be presented in the parliament on Sept. 7.

Turnover stood at 1.5 billion Sri Lankan rupees ($9.83 million), well above this year’s daily average of around 862.4 million rupees.

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.<