Sri Lankan shares hit more than 1-wk closing low as rising rates weigh

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

Sri Lankan shares hit a more than one-week closing low on Tuesday, their fourth straight session of losses, as investors sold shares of blue chip companies such as John Keells Holdings Plc amid concerns over rising interest rates.

The Colombo stock index fell 0.2 percent to 6,127.49, slipping to its lowest close since Feb. 9.

“We have seen some interest on retail sector counters,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. “Investors are mainly waiting for some positive news and now watching the direction of the fixed-income segment.”

Yields on treasury bills rose 3 to 10 basis points at a weekly auction on Tuesday. They have risen 44 to 73 basis points since Oct. 7 to more than four-year highs, while the central bank has kept key policy rates on hold.

Conglomerate John Keells Holdings Plc dropped 0.6 percent, while Ceylon Tea Services Plc fell 11.1 percent.

Turnover stood at 300.4 million rupees ($1.99 million), less than half this year’s daily average of 616.2 million rupees.

Foreign investors net bought 19.9 million rupees worth of equities on Tuesday, but have net sold 252.8 million rupees worth shares so far this year.

Investors are expected to wait for direction from the outcome of a sovereign bond issue, analysts said.

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

($1 = 151.1500 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.