Sri Lankan stock end down almost 02-pct
EconomyNext – Sri Lankan stock prices tumbled across-the-board Monday to a two-week low, weakening for the fourth straight trading day in a sell-off that stock brokers attributed to political uncertainty following the election of a new government.
The All Share Price Index plunged below the psychological 7,500 mark, falling almost two percent (147.18 points) to 7,366.68 while the S&P SL20 index, which tracks the top 20 largest and most liquid stocks, tumbled 2.5 percent (107.92 points) to end at 4,140.11.
Turnover on the Colombo Stock Exchange was 860 million rupees with share prices in all sectors except one closing weaker.
There has been speculation that the equities downturn was caused by ‘black money’ associated with the former regime leaving the market but stock brokers declined comment, noting that the sell-off was widespread and involved even retail investors.
Amali Perera, Assistant Manager, Research at Asia Securities, said investors were being cautious because of the political uncertainty after the January 8 presidential poll.
The incumbent, strongman Mahinda Rajapaksa, was ousted in election by Maithripala Sirisena who was the candidate of a coalition of opposition parties.
The new government aims to call parliamentary polls by April and has a 100-day programme of urgent reforms to restore the independence of public institutions like the judiciary and police.
Bartleet Religare Securities said foreign investors were on the buying side with a net foreign inflow of 80 million rupees.
Brokers Lanka Securities said the market has dropped by 239.11 points in last four sessions and has now erased almost all of the four percent percent gains during the new year.
The benchmark All Share Price Index (ASPI) was dragged down mainly by losses in Commercial Bank, John Keells Holdings (JKH), Access Engineering and Sri Lanka Telecom.
Commercial Bank closed at 180.00 rupees, down 4.4, John Keells Holdings fell 1-.5 percent to 237.00 rupees and Sri Lanka Telecom ended at 50.50, down 3.4 percent.
Access Engineering, which had been falling for several days, was the most actively traded stock, closing down 10 percent at 27.00.
Analysts said investors were worried the new government would scrap some planned construction projects and that company might not win as many deals as it did previously.
Lanka Securities said Access Engineering fell after news the government had suspended construction of the northern expressway and the investors’ expectations on possible cancellation of orders given to construction companies.