Lacklustre performance of stock market persists

Saturday, 26 September 2015 00:03 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares ended little changed on Friday ahead of the central bank’s policy rate decision later in the day where it is widely expected to keep its policy rates unchanged.

The main stock index closed near its more than two-month closing low hit on Monday, down 0.06% at 7,110.80.

“There seems to be some investor confidence coming into the market. But investors are waiting to see the direction,” said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

“Going into October, the market will be positive with confidence improving. The rupee is also seen settling gradually.”

The monetary policy rate announcement is scheduled at 1230 GMT.

A weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.

Turnover was 1.12 billion rupees ($7.95 million), its highest since Aug. 27 and in line with the daily average of 1.11 billion rupees. The turnover has been roughly half of this year’s daily average since Aug. 31, stock exchange data showed.

Analysts said investors were waiting to see how the government would bridge the budget deficit and where the revenue would come from, in its November budget.

The IMF last week said the fiscal deficit is likely to range between 5.5% and 6% in 2015, much higher than an official target of 4.4% due to falling government revenues.

Foreign investors were net buyers of 317.4 million rupees worth of shares on Friday, but they have been net sellers of 2.49 billion rupees so far this year.

Shares of Ceylon Tobacco Company Plc fell 0.88%, while Peoples Leasing Plc dropped 3.49%.