Oct 16 (Reuters) - Sri Lankan stocks slipped on Thursday, led by profit-taking in banks, though foreign investors bought into risky assets a day after yields on 364-day treasury bills reversed their falling trend.
Stockbrokers said shares would continue to gain though there could be some volatility due to political concerns as the government is planning early presidential polls, and the reversal in the falling trend of interest rates.
Sri Lanka's main stock index fell 0.44 percent, or 31.76 points, to 7,257.07.
Foreign investors bought 572.2 million rupees ($4.38 million) worth of shares on Thursday, extending the year-to-date net foreign inflow to 10.11 billion rupees, exchange data showed.
"Little bit of profit-taking brought the market down, investors are waiting to see whether the interest rates are going to settle at these levels," said a stock broker asking not to be named.
Softlogic Stockbrokers COO Danushka Samarasinghe said the bottoming out of interest rates will not have a negative impact on stocks as the gain in rates may not be significant for investors to make a shift in the short- to medium-term.
President Mahinda Rajapaksa could hold a snap election in January, nearly two years before he has to, a close ally said, amid signs his popularity is fading among people who criticise his party for abusing power.
Yields on 364-day t-bills rose 11 basis points to 6.00 percent, the first rise since Dec 20, 2013.
The Sri Lankan central bank chief on Thursday, a day before the key policy rates decision, said that a rise in the yield at a 364-day treasury bill auction this week was a signal where the authorities want rates to be.
Local investors have been buying stocks as they have no other options in a multi-year low interest rate regime.
DFCC Bank Plc led the fall with a 3.38 percent loss, while leading fixed line telephone operator Sri Lanka Telecom Plc fell 1.17 percent.
The day's turnover was 1.54 billion rupees, more than this year's daily average of over 1.36 billion rupees.
Stockbrokers said shares would continue to gain though there could be some volatility due to political concerns as the government is planning early presidential polls, and the reversal in the falling trend of interest rates.
Sri Lanka's main stock index fell 0.44 percent, or 31.76 points, to 7,257.07.
Foreign investors bought 572.2 million rupees ($4.38 million) worth of shares on Thursday, extending the year-to-date net foreign inflow to 10.11 billion rupees, exchange data showed.
"Little bit of profit-taking brought the market down, investors are waiting to see whether the interest rates are going to settle at these levels," said a stock broker asking not to be named.
Softlogic Stockbrokers COO Danushka Samarasinghe said the bottoming out of interest rates will not have a negative impact on stocks as the gain in rates may not be significant for investors to make a shift in the short- to medium-term.
President Mahinda Rajapaksa could hold a snap election in January, nearly two years before he has to, a close ally said, amid signs his popularity is fading among people who criticise his party for abusing power.
Yields on 364-day t-bills rose 11 basis points to 6.00 percent, the first rise since Dec 20, 2013.
The Sri Lankan central bank chief on Thursday, a day before the key policy rates decision, said that a rise in the yield at a 364-day treasury bill auction this week was a signal where the authorities want rates to be.
Local investors have been buying stocks as they have no other options in a multi-year low interest rate regime.
DFCC Bank Plc led the fall with a 3.38 percent loss, while leading fixed line telephone operator Sri Lanka Telecom Plc fell 1.17 percent.
The day's turnover was 1.54 billion rupees, more than this year's daily average of over 1.36 billion rupees.
($1 = 130.7000 Sri Lankan rupee)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
No comments:
Post a Comment