Sri Lankan stocks recover from more-than-2-month closing low
COLOMBO, Sept 22 (Reuters) – Sri Lankan shares snapped a five-session losing streak on Tuesday and recovered from their lowest close in more than two months hit in the previous session after the government gave some clarity on the specific duties of each ministry.
Despite parliamentary elections ending in August and the appointment of the cabinet early this month, the government had until Tuesday failed to announce the institutions and their role under each ministry, leading to uncertainty among investors.
The government notification through the gazette and some foreign interest in stocks boosted sentiment, brokers said.
The main stock index ended 0.2 percent up at 7,118.38, edging up from its lowest close since July 15 hit on Monday.
"Investors were waiting for some kind of positive news. The gazette notification with subjects and functions of each ministry has given some kind of clarity to the market," said a stockbroker asking not to be named.
However, a weaker rupee and upward pressure on interest rates weighed on sentiment.
The rupee fell 0.11 percent on Tuesday to a fresh low of 141.00 per dollar due to importer demand for dollars, while exporters held on to the greenback on expectations of further depreciation.
Turnover was 806.4 million rupees ($5.72 million), compared with the daily average of 1.11 billion rupees. The turnover has been mostly about half of this year’s daily average since Aug. 31, stock exchange data showed.
Analysts said investors were waiting to see how the government would bridge the budget deficit and where the revenue would come from, in its November budget.
The weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.
Foreign investors were net buyers of 30.6 million rupees worth of shares on Tuesday, but they have been net sellers of 2.96 billion rupees so far this year.
Shares of Lanka ORIX Leasing Company Plc jumped 5.99 percent while conglomerate John Keells Holdings Plc rose 1.33 percent. (Colombo/September 22 2015)