Shares hover near 5-month closing low

Thursday, 7 June 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares ended slightly weaker on Wednesday, hovering near their lowest close in over five months hit earlier in the week, led by diversified shares such as John Keells Holdings Plc, while foreign buying helped boost the turnover.

Foreign investors bought net Rs. 188.4 million ($1.19 million) worth of equities on Wednesday. The market has witnessed a year-to-date net foreign outflow of Rs. 452.7 million worth of shares. The Colombo stock index closed 0.15% weaker at 6,399.91. “Investors are worried over continued uncertainty. They are waiting for some positive news,” said Richard Pieris Securities Ltd. Chief Operating Officer Reshan Kurukulasuriya.

Most of the investors have adopted a wait-and-watch approach, hoping for some positive news especially on the economic front, analysts said.

Turnover was Rs. 510.1 million, below this year’s daily average of Rs. 986.4 million.

A weaker rupee, political uncertainty and the recent fuel price hike weighed on sentiment in the past week, as local investors mostly remained on the sidelines as they gauged the impact of the floods that killed 24 people in the island nation over the past two weeks, brokers said.

The rupee touched its record low of 158.80 per dollar last week owing to the demand from foreign banks and importers for the greenback, but ended steady on late inflows from remittances.

Shares in conglomerate John Keells Holdings Plc ended 0.6% weaker, while BRAC Lanka Finance Plc closed 9.7% down.

Foreign investors, who mostly sold shares of John Keells last week, bought the market heavyweight after low share prices “made it more attractive”, stockbrokers said.

MSCI Frontier Markets 100 Index, which captures large- and mid-cap representation across 29 frontier markets, removed Keells from its index, triggering the foreign selling.