Sri Lanka shares end steady
COLOMBO, April 23 (Reuters) – Sri Lankan shares ended steady in thin trade on Thursday, hovering around their highest in more than six weeks hit in the previous session with investors offloading telecom and diversified shares, as they awaited President Maithripala Sirisena’s address to the nation later in the day.
Analysts expect Sirisena, who promised to dissolve parliament after 100 days from his election, to explain his policies for political stability and implement the promised constitutional and electoral reforms.
"Investors are awaiting for directions from his speech, which may give some clarity on how he would achieve political stability," a stockbroker said on condition of anonymity.
The bourse hit a six-week high on Wednesday on hopes of better earnings, with positive sentiment continuing due to lower interest rates.
The main stock index ended 0.04 percent lower at 7,114.39, slipping from its highest close since March 10 hit on Wednesday. It has, however, gained 3.13 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 26-36 basis points since then.
Some analysts said the markets would stay volatile until parliamentary elections are announced.
The market saw a net foreign outflow of 1.77 million rupees ($13,318) on Thursday, but net foreign buying stood at 3.67 billion rupees so far this year.
Turnover was 592.5 million rupees, just above half of this year’s daily average of around 1.08 billion rupees.
Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.
Shares of leading mobile phone operator Dialog Axiata Plc fell 2.59 percent, while Hemas Holdings Plc fell 2.57 percent. Leading fixed-line telephone operator Sri Lanka Telecom Plc fell 1.47 percent.
The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.
Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe’s party does not have a majority in parliament, stockbrokers said.