Bourse falls to 8-week closing low on growth worries

Reuters: Sri Lankan shares fell for a third straight session on Wednesday and posted their lowest close in eight weeks, as investors sold diversified stocks such as John Keells Holdings Plc on worries over slower economic growth, brokers said.

Sri Lanka’s economy grew by 3.1% in 2017, the slowest pace in 16 years and well below the 4.5% seen in 2016, revised government data released on Tuesday showed.

The Colombo stock index fell 0.26% to 6,445.97, its lowest close since 24 Jan. It dropped 0.6% last week in its third straight weekly decline.“The market is coming down on worries over the lower growth and political uncertainty,” said Richard Pieris Securities Chief Operating Officer Reshan Kurukulasuriya.

“With the index trading below 6,500, it’s a buyer’s market as most of the stocks are undervalued. But political uncertainty and no visible policy direction hurt sentiment.”

Turnover was Rs. 632.2 million ($4.05 million), less than this year’s daily average of around Rs. 936.4 million.

Shares in conglomerate John Keells Holdings dropped 1.1%, Ceylon Cold Stores Plc fell 1.7% and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, declined 2.2%.

Foreign investors bought a net Rs. 164.9 million worth of shares, extending the year-to-date net foreign inflow to Rs. 7.4 billion worth of equities so far this year.