Colombo Bourse marks nine week closing low; turnover at seven year high

Thursday, 29 March 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares hit a nine-week closing low on Wednesday but turnover touched a seven-year high as foreign investors exited from Lanka ORIX Leasing Company Plc.

The Colombo stock index ended 0.23 points weaker at 6,440.20, its lowest closing level since 23 Jan.

LOLC Holdings (Pvt) Ltd. bought nearly 30% stake in its own subsidiary, Lanka Orix Leasing Company from ORIX Corporation of Japan, the company said in a disclosure to the bourse.

The Japanese firm’s stake sale resulted in a foreign fund outflow of a net 12.7 billion rupees ($81.62 million) worth shares on Wednesday, reversing the year-to-date net foreign inflow to a net 5.3 billion rupees worth outflow.

This was the highest net outflow in the last nine years for which data is available.

Turnover stood at 13.4 billion rupees ($86.12 million), the highest since 16 March, 2012 and well above this year’s daily average of around 1.2 billion rupees.

“The biggest trade was the LOLC deal. Apart from that, there was no improvement in sentiment as investors are waiting for the outcome of the no-confidence motion against the prime minister,” said Acuity Stockbrokers CEO Prashan Fernando.

Losses in shares such as Ceylinco Insurance Plc, which fell 6.8%, and Ceylon Theatres Plc, which ended 4.4% weaker, offset gains by Lanka ORIX leasing Company and Dialog Axiata Plc, which ended up 2.2%.

Shares in Lanka ORIX leasing Company rose 6.3%.

Prime Minister Ranil Wickremesinghe is facing a no-confidence motion, which will be debated on 4 April before voting. Analysts say Wickremesinghe needs support from many political parties to survive the vote.

Negative sentiment over the island nation’s slower economic growth also weighed on the market, brokers said.

The index fell 1% last week, its fourth straight weekly drop.

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 last week showed.