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Sri Lankan shares slip from 2-week high

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JULY 17, 2018

COLOMBO, July 16 (Reuters) – Sri Lankan shares edged lower on Monday from their highest close in two weeks in lighter-than-usual trading as foreign investors sold stocks.

The Colombo stock index ended 0.12 percent weaker at 6,130.62, slipping from its highest close since June 29 hit on Friday. It rose 0.5 percent last week, its first weekly gain in eight weeks.

“Today we saw some profit taking. There was some selling by those who managed to buy at the bottom,” said Dimantha Mathew, head of research, First Capital Holdings.

“There is not much of selling pressure. So we don’t think this selling will continue for long time.”

Turnover stood at 304.1 million rupees ($1.9 million), around a third of this year’s daily average of 895.8 million rupees.

The benchmark stock index hit its lowest close since March 30, 2017 on July 4, and has declined for 20 sessions in 27 through Monday.

A downward revision in economic growth estimate by the central bank has hit sentiment, analysts said.

Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, the central bank’s governor, Indrajit Coomaraswamy, said early this month.

Foreign investors sold equities net worth 177.7 million rupees on Monday, extending the year-to-date net foreign sale to 2.6 billion rupees.

Shares in Cargills (Ceylon) Plc fell 3.7 percent, while Lanka ORIX leasing Co Plc lost 3.6 percent. The biggest listed lender Commercial Bank of Ceylon Plc closed 1.5 percent lower.

Investors are waiting for some positive news both on the economic and political front, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.

The International Monetary Fund said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs. ($1 = 159.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)