Sri Lanka hotel stocks plunge as virus fears grow
ECONOMYNEXT- Sri Lanka’s stocks closed 0.84 percent lower on Tuesday, with plunging hotel stocks dragging the market down amid fears of fallout from coronavirus.
Sri Lanka has said a Chinese tourist tested positive for the coronavirus who had stayed around 6 days at several hotels in the island.
China is Sri Lanka’s third largest tourism market, bringing in 9 percent of the 1.9 million visitors to the country in 2019.
John Keells Hotels (KHL) and Asian Hotels & Properties (AHPL), which own the country’s largest hotel chain Cinnamon, closed 4.76 percent and 1.35 percent down respectively.
Aitken Spence Hotel Holdings, the country’s second largest resort operator, closed 3.91 percent lower, amid officials telling EconomyNext that they have cancelled all reservations from Chinese nationals.
Anilana Hotels and Properties closed 18.18 percent lower, while Eden Hotel Lanka fell 15.56 percent, Amaya Leisure fell 11.59 percent and Hotel Sigiriya fell 7.62 percent.
The hotels index recorded the highest fall among industry indices on Tuesday, down 2.37 percent from Monday.
Health Services Director General Anil Jasinghe told reporters on Tuesday that one patient suspected of having early symptoms was admitted to the Infectious Disease Hospital from a hotel in the Ahungalla area, a popular beach destination.
He said the patient was isolated and was being tested for the coronavirus. Jasinghe said the hotel in Ahungalla, and a hotel in Sigiriya where the Chinese tourist had visited were being investigated by public health officials.
Sri Lanka’s hotel sector is facing a double whammy during the peak Chinese tourism season, after total arrivals fell nearly 20 percent in 2019 due to the Easter Sunday bombings.
John Keells Holdings, which owns KHL and AHPL, dragged the market down on Tuesday, closing 3.40 rupees or 2.07 percent down at 160.50 rupees a share.
Cinnamon has been continuously offering steep discounts over the past week for its hotels during a peak month, indicating that hotels are not full, after a recovery in December amid low room rates.
At the Colombo Stock Exchange, only healthcare gained in the industry indices, closing 0.19 percent higher.
Lanka Hospitals gained 50 cents or 1.27 percent to close at 40 rupees a share and Singhe Hospitals gained 20 cents or 14.29 percent to 1.60 rupees a share.
The All Share Price Index (ASPI) closed 0.84 percent or 49.82 points down at 5,884.81 on Tuesday, after falling 0.94 percent on Monday.
The ASPI on Tuesday fell to a low 5,880.82 early in the morning session, before recovering marginally towards the rest of the day.
The ASPI is now at the lowest levels since January 08, when the market fell 2.11 percent to 5,898.84.
The S&P SL20 Index of more liquid stocks closed 0.58 percent or 16.46 points down at 2,826.97.
“The global stock selloff due to the coronavirus is being witnessed in Sri Lanka as well,” a broker said.
In Tokyo, the Nikkei 225 index plunged 0.55 percent on Tuesday, after nosediving more than 2 percent on Monday.
In China and Hong Kong, where the virus has taken hold, markets were closed for the traditional Chinese New Year holidays.
European stocks which fell more than 2 percent on Monday showed some recovery on Tuesday morning. Oil prices too fell 2 percent on Monday.
International news agency AFP quoted health experts as saying that the coronavirus could affect tens of thousands across the world, and the epidemic could last for months.
The Chinese government asked its citizens to postpone foreign travel, as the death toll hit 100. The epidemic reached massive proportions as countries with large Chinese populations celebrated their traditional new year.
Over 400 million Chinese were projected to travel abroad during the new year, BBC reported. (Colombo/Jan28/2020)