Sri Lanka stocks fall 0.34-pct, rupee edges down
ECONOMYNEXT – Sri Lanka stocks fell 0.34 percent on Monday on political uncertainty and foreign selling in Hemas Holdings, while the rupee fell marginally against the US dollar on global concerns as bond yields rose, dealers and brokers said.
The rupee closed at 154.05/10 against the greenback in the spot market, depreciating marginally from 153.95/154.00 on Friday, on concerns of rising oil prices and US benchmark yields firming up, dealers said.
Bond yields increased on Monday after an apparent presidential threat to take-over economic management from the prime minister’s party which was played down by a member of his party.
An eight-year bond closed 27 basis points higher at 9.75/85 percent in two-way quotes. A six year bond closed 25 basis points higher at 9.60/70 percent. A 15-year bond closed 25 basis points higher at 10.00/30 percent.
Foreign inflows were seen in to shorter bond tenures, dealers said.
However, a one year bond saw yields increase 22 basis points to 8.90/9.00.
The bond selling was domestic investor driven on account of the political uncertainty over the president’s statement, dealers said.
The Colombo All Share index fell 22.10 points to 6,421.40. The S&P SL20 index of more liquid stocks declined 0.49 percent, down 18.41 points to 3,717.07.
Market turnover was 460.7 million rupees, down 73 percent from the previous close.
"The market declined slightly on a relatively low turnover. JKH was a major contributor to market turnover with foreign buying in the stock," said Sumith Perera, Head of Portfolio at Ceylon Guardian.
"The market is drifting ahead of local government elections with no clear direction," he said.
The benchmark index was weighed down by Hemas Holdings, Lanka Orix Leasing and HNB, according to data published by the Colombo Stock Exchange.
Hemas Holdings on Friday announced it had entered into a purchase agreement for 5.7 billion rupees worth of shares of Atlas Axillia, a school and office stationary brand.
"The decline in Hemas share price is unrelated to the acquisition, which is at reasonable multiples," Perera said.
"There was a bit of foreign selling in Hemas even prior to Friday’s announcement," he said.
On Monday, Hemas Holdings closed 6.60 rupees lower at 116.30 rupees.
Lanka Orix Leasing Company closed 4.20 rupees lower at 115.70 rupees. HNB closed at 250 rupees, down 2.80 rupees.
Hotel group Jetwing Symphony fell 1.40 rupees to 13.40 rupees. LOLC Finance closed 20 cents lower at 3.60 rupees.
Net foreign buying was 196.64 million rupees, up 417 percent compared to net selling of 62 million the previous close.
Foreign buying in JKH amounted to 213.4 million rupees and selling in Commercial Bank amounted to 41.2 million, Asia Securities said.
JKH closed 80 cents higher at 164.80. Commercial Bank closed 60 cents lower at 136.10 rupees.
Two off market negotiated trades, or crossings, in JKH amounting to 132 million rupees accounted for 28.6 percent of market turnover.
(COLOMBO, January 22, 2018)