Shares hit more than 1-wk closing low as rising rates weigh

Wednesday, 22 February 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares hit a more than one-week closing low on Tuesday, their fourth straight session of losses, as investors sold shares of blue chip companies such as John Keells Holdings Plc amid concerns over rising interest rates.

The Colombo stock index fell 0.2% to 6,127.49, slipping to its lowest close since 9 February.

“We have seen some interest on retail sector counters,” said Dimantha Mathew, head of research at First Capital Equities Ltd. “Investors are mainly waiting for some positive news and now watching the direction of the fixed-income segment.”

Yields on treasury bills rose 3 to 10 basis points at a weekly auction on Tuesday. They have risen 44 to 73 basis points since 7 October to more than four-year highs, while the central bank has kept key policy rates on hold.

Conglomerate John Keells Holdings Plc dropped 0.6%, while Ceylon Tea Services Plc fell 11.1%.

Turnover stood at Rs. 300.4 million ($ 1.99 million), less than half this year’s daily average of Rs. 616.2 million.

Foreign investors net bought Rs. 19.9 million worth of equities on Tuesday, but have net sold Rs. 252.8 million worth shares so far this year.

Investors are expected to wait for direction from the outcome of a sovereign bond issue, analysts said.

The Cabinet last week approved a $ 1.5 billion sovereign bond issue to repay loans and manage interest payments.