CSE ends flat near 4-week low; lenders gain

Thursday, 10 May 2018 00:25 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares ended little changed yesterday (9 May), at a near four-week low, as losses in shares of beverage companies outweighed gains in bank stocks even as many investors continued to stay on the sidelines looking for fresh cues.

President Maithripala Sirisena’s appeal to his own coalition government and the opposition in parliament on Tuesday (8 May) to end a power struggle failed to cheer investors as weakness in the rupee continued to weigh.

The Sri Lankan rupee hit a fresh low last week on importer demand for the US currency, dealers said. Analysts said depreciation of the rupee also weighed on the sentiment as it is likely to dent the profits of some listed firms that rely heavily on imports.

The Colombo stock index ended 0.03% weaker at 6,483.65, its lowest since April 12. The index lost 0.37% last week, its second straight weekly fall.

“Market is searching for directions,” said First Capital Holdings Research Head Dimantha Mathew. “After a long time, we saw the turnover crossing Rs. 1 billion thanks to a block deal. We also saw some buying interest in banking sector which is a good sign for the market.”

Shares of Nestle Lanka PLC fell 2.2%, while conglomerate John Keells Holdings PLC ended 0.3% down and Distilleries Company of Sri Lanka PLC closed 0.5% lower.

Union Assurance PLC, which accounted for 24% of the day’s turn over, closed 2.6% higher.

Fitch Ratings has said that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

Turnover stood at Rs. 1.2 billion ($7.60 million), its highest since April 4 and more than this year’s daily average of Rs. 1.03 billion.

Foreign investors bought a net Rs. 86.8 million worth of equities yesterday, but the market has seen a net foreign outflow to Rs. 400.2 million worth of equities so far this year.