Sri Lankan shares hit 12-wk low as investors eye budget, 5-yr plan
COLOMBO, Oct 24 (Reuters) – Sri Lankan shares closed Monday at their lowest in 12 weeks in lean trade as investors awaited cues from the central government budget and the five-year plan ahead of corporate results.
Sri Lanka’s quarterly earnings season started two weeks back, but the bulk of locally listed firms will not report until late October or early November.
The national budget is scheduled to be presented on November 10.
The benchmark index of the Colombo Stock Exchange ended 0.45 percent or 29.19 points lower at 6,418.34, its lowest close since August 1. The index had fallen 0.54 percent last week, its second straight weekly loss.
"There is no improvement in the economic conditions and the uncertainty prevails, which is deterring the investors from taking long term position," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.
"Market is waiting for the government’s five-year plan and the budget. We see investors have switched to wait-and-see mode. Not many of them are looking at long term until some certainty comes into place."
Turnover stood at 301.3 million rupees ($2.05 million), less than half of this year’s daily average of around 740 million rupees.
Stockbrokers said the stock market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on October 17, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.
This is likely to delay one of the promises of Sirisena’s coalition government, eliminating corruption, and could hurt business confidence, analysts said.
Foreign investors bought a net 62.5 million rupees worth equities on Monday, extending the net foreign inflow for the past nine days to 1.21 billion rupees worth of shares.
They have sold a net 1.76 billion rupees worth of shares so far this year.
Shares in Ceylon Tobacco Company fell 2 percent after media reports suggested there could be a further hike in cigarette prices, while Commercial Leasing and Finance Plc lost 5.3 percent.