Share index up; economic woes weigh

Thursday, 17 March 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares edged up on Wednesday, halting a two-day losing streak, but concerns over a higher budget deficit and economic growth, which could aggravate due to a power crisis, dampened investor sentiment, brokers said.

The benchmark share index was up 0.3% or 17.84 points at 5,988.24 at 0720 GMT.

Investors preferred fixed interest rate bearing assets over shares due to a rise in yields on treasury bills, which are hovering at two-year highs, and on the Central Bank’s unexpected interest rate hike in mid-February, dealers said.

“Market is up. But investors are awaiting to see the direction of the economy. At the moment, there is a gloomy economic outlook,” said Dimantha Mathew, Head of Research, First Capital Equities Ltd.

Sri Lanka’s economy is expected to grow 5.3% in 2016, data from the State statistics office showed, but analysts say tight monetary and fiscal policies may curb its growth.

The $82.2 billion economy expanded at a sluggish 2.5% in the December quarter, down from a revised 5.6% in the previous quarter.

Analysts and economists worry slower growth could reduce corporate earnings of some listed firms.

Turnover stood at Rs. 216.24 million ($1.50 million).

The rupee traded weaker in dull trade, currency dealers said.

One-week rupee forwards, which act as a proxy for the spot currency, traded at 145.40/45 per dollar, compared with Tuesday’s close of 145.25/30 at 0728 GMT.

The spot currency did not trade below 143.90, seen as the Central Bank’s desired level.

CSE halts trading temporarily due to power outage

A power outage resulted in a temporary trading halt of 17 minutes at the Colombo Stock Exchange (CSE) yesterday, the Colombo Stock Exchange (CSE) said in a short statement.

Trading was halted at 9:58 a.m. on Wednesday morning and restored at 10:15 a.m. Trading and all other operations of the CSE continued for the rest of the day without interruption.

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