CSE extends fall as foreigners sell

Reuters: Sri Lankan shares fell for a fourth straight session yesterday, as foreign investors pared holdings in market heavyweight John Keells Holdings amid global worries.

Lacklustre corporate results also hit investor appetite for riskier assets, analysts said.

The Colombo stock index fell 0.43% to 6,086.74, its lowest close since 10 July. It has declined about 4.2% so far this year.

Turnover was Rs. 238.2 million ($1.49 million) yesterday, less than a third of this year’s daily average of Rs. 833.1 million.

“Foreign selling in Keells dragged the index and there was no market moving news. Retail and institutional investors were not in the market and we saw very low turnover,” said Acuity Stockbrokers CEO Prashan Fernando.

Poor earnings in the June quarter and possible loose fiscal policies in the upcoming budget to woo voters ahead of next year provincial council and presidential polls also hurt investor sentiment, some other brokers said.

Equities in emerging markets broadly struggled after signs China’s economy was cooling further, with fixed-asset investment growth in January-July at its slowest pace since at least 1996.

Foreign investors sold shares worth a net Rs. 125.3 million rupees yesterday, extending the foreign outflow to a net Rs. 2.76 billion worth of equities so far this year.

Shares in John Keells, which accounted for more than 50% of the day’s turnover, fell 0.4%, while BRAC Lanka Finance slumped 17.4%.

The Central Bank left its key policy rates unchanged, as expected, on 3 August, citing its goals of stabilising inflation and fostering sustainable economic growth.

Central Bank Governor Indrajit Coomaraswamy said the economy was unlikely to grow more than 4% in 2018, falling short of an earlier estimate of 5%.