Bourse dip persists as foreign net outflow tops Rs. 3 b as part emerging market selloff

Saturday, 8 February 2014 04:08 - - {{hitsCtrl.values.hits}}

REUTERS: Sri Lankan shares fell for a fourth straight session on Friday to end at a three-week closing low on falls in large-cap shares while foreign investors dumped risky assets as part of a selloff in emerging markets. The main stock index fell 0.43%, or 26.78 points, to 6,141.72, its lowest close since 17 January. Foreign investors sold a net Rs. 460 million ($ 3.52 million) worth of shares on Friday, extending the foreign outflow to Rs. 3.42 billion in the last two sessions. The bourse has seen Rs. 2.03 billion of foreign outflow so far in 2014, after enjoying a net inflow of Rs. 22.88 billion last year. “The good news is that local funds and high net worth investors are buying. That means local confidence is building up,” said a stockbroker. “We have to wait and see whether the foreign selling will continue.” Shares in Nestle Lanka PLC fell 3.23% to Rs. 2,100, while market heavyweight Ceylon Tobacco Company PLC fell 1.00% to Rs. 1,252.40. Shares in top-listed lender Commercial Bank of Ceylon PLC fell 2.36% to Rs. 120.10. Foreign investors sold a net 166,880 shares of conglomerate John Keells Holdings PLC and 47.5 million shares in top mobile phone operator Dialog Axiata PLC, which gained 0.17% and 3.3% respectively. Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations. Some stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst. Stockbrokers said local investors are active in the market after interest rates on treasury bills eased to multi-year lows, making fixed-income assets unattractive. The index has risen 3.87% so far this year, following a 4.8% gain in 2013. It fell in the previous two years. The day’s turnover was Rs. 1.28 billion, well above last year’s daily average of about Rs. 828.4 million.

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