Bourse dips to 2-1/2 month low on political uncertainty

Saturday, 27 June 2015 01:10 -     - {{hitsCtrl.values.hits}}

(Reuters) - Shares fell on Friday to near 2-1/2 month lows due to foreign outflows, with diversified and telecommunication companies leading the drop as uncertainty around a parliamentary election hit investor appetite.

Analysts expect the trend to continue until President Maithripala Sirisena dissolves Parliament and calls for an election. Sirisena has said he will dissolve Parliament once some crucial reforms, including an electoral bill, are passed.

The main stock index ended 0.22%, or 15.13 points, lower at 7,016.20, its lowest since 15 April.

Turnover stood at Rs. 861.3 million ($ 6.4 million), less than this year’s daily average of about Rs. 1.1 billion.

The market saw net foreign outflows of Rs. 460.3 million on Friday, extending net foreign outflows over the past 23 sessions to Rs. 4.09 billion in stocks.

“Foreigners are selling due to global redemptions, expectations of a Federal Reserve rate hike, possible market corrections in frontier and emerging markets and the directionless political scenario unravelling in Sri Lanka,” said Danushka Samarasinghe, head of research at Softlogic Securities.

Shares of leading mobile phone operator Dialog Axiata Plc fell 2.8%, while large-cap Ceylon Tobacco Co Plc lost 0.99%.

Conglomerate John Keells Plc fell 0.54% a day after disclosing that its subsidiary Waterfront Properties (Private) Ltd had finalised a $ 395-million syndicated project development facility with Standard Chartered Bank for debt financing of its luxury real estate project.