Shares edge up; political woes hurt sentiment

Tuesday, 23 June 2015 00:30 -     - {{hitsCtrl.values.hits}}

Reuters: Shares inched up on Monday, recovering from a two-month low hit in the previous session, led by large caps, but trading was choppy as political woes ahead of an announcement on Parliamentary election date weighed on sentiment.

The main stock index ended up 0.06% at 7,039.65, edging up from its lowest close since 15 April.

Turnover stood at Rs. 488.9 million ($3.7 million), its lowest since 10 June and less than half of this year’s daily average of about Rs. 1.1 billion.

“Investors are seriously looking for some kind of direction in politics either calling a Parliamentary election or dissolution of the Parliament,” a stockbroker said on condition of anonymity.

“Uncertainty is killing the market. Buyers are waiting for some news. If they see the date for the election, they can at least plan their investments accordingly,” the stockbroker said.

Foreigners are leaving because they want to reduce their exposure to the nation’s risky assets, he said.

The market saw a net foreign outflow of Rs. 51.2 million on Monday, extending net foreign sales in the past 19 sessions to Rs. 3.47 billion.

The Bourse, however, has seen net inflows of Rs. 2.46 billion into equities so far in 2015.

Investors were confused due to a lack of direction on interest rates, economic policies, and on the timing of the Parliamentary election, analysts said.

President Sirisena’s Government has said he would dissolve Parliament once some crucial reforms, including an electoral bill, are passed, but is yet to fix a date for the election.

Shares in large cap Nestle Lanka ended 6.17% higher, while market heavyweight John Keells Holdings JKH.CM gained 1.16%.