Sri Lankan shares fall for 2nd day to near 1-wk closing low

COLOMBO, Jan 26 (Reuters) – Sri Lankan shares fell for a second straight session on Tuesday to their near one-week closing low in thin trade after the central bank kept its key policy rates unchanged and as investors worried over volatile global markets and rising returns on risk-free assets.

Turnover slumped to 341.3 million rupees, the lowest since Dec. 31, and well below this year’s daily average of 791.7 million rupees.

The main stock index ended 0.5 percent, or 31.96 points, lower at 6,322.87, the lowest close since Jan. 20.

"There is nothing much happening. The market is lying on the back of retailers," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

"It’ll try to consolidate at these levels with the earning season to start. But the market cannot sustain unless proper measures are taken to draw more foreign investment."

The index has fallen 8.3 percent so far this year as foreign investors, unnerved by global concerns over China’s economy, have cut their exposure.

Foreign investors, who have been net sellers of 2.28 billion rupees worth of equities so far this year, were net buyers of 3.79 million rupees worth of shares on Tuesday.

The central bank, as expected, kept its key policy interest rates unchanged after market hours on Monday, saying the effects of previous adjustments were still trickling down into the economy and expected private sector credit growth to decelerate slowly.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

Shares of conglomerate John Keells Holdings Plc dropped 2.1 percent, Ceylon Cold Stores Plc fell 3.65 percent and Distilleries Company of Sri Lanka Plc declined 2.10 percent.





Commercial Bank of Ceylon Plc, the country’s biggest listed lender, declined 0.47 percent.

Latest Comments

Your email address will not be published. Required fields are marked *