Sri Lanka shares dip to 2-1/2 month low on political uncertainty
COLOMBO, June 26 (Reuters) – Sri Lankan shares fell on Friday to near 2-1/2 month lows due to foreign outflows, with diversified and telecommunication companies leading the drop as uncertainty around a parliamentary election hit investor appetite.
Analysts expect the trend to continue until President Maithripala Sirisena dissolves parliament and goes for an election. Sirisena has said he will dissolve parliament once some crucial reforms, including an electoral bill, are passed.
The main stock index ended 0.22 percent, or 15.13 points, lower at 7,016.20, its lowest since April 15.
Turnover stood at 861.3 million rupees ($6.4 million), less than this year’s daily average of about 1.1 billion rupees.
The market saw net foreign outflows of 460.3 million rupees on Friday, extending net foreign outflows over the past 23 sessions to 4.09 billion rupees in stocks.
"Foreigners are selling due to global redemptions, expectations of a Federal Reserve rate hike, possible market corrections in frontier and emerging markets and the directionless political scenario unravelling in Sri Lanka," said Danushka Samarasinghe, head of research at Softlogic Securities.
Shares of leading mobile phone operator Dialog Axiata Plc fell 2.8 percent, while large-cap Ceylon Tobacco Co Plc lost 0.99 percent.
Conglomerate John Keells Plc fell 0.54 percent a day after disclosing that its subsidiary Waterfront Properties (Private) Ltd had finalised a $395-million syndicated project development facility with Standard Chartered Bank for debt financing of its luxury real estate project.