Sri Lankan shares at 18-month high on foreign buying

Reuters: Sri Lankan stocks rose to an 18-month high on Friday led by blue-chips as foreign buying continued, brokers said.

Analysts said concerns over a proposed tax bill weighed on overall investor sentiment.

The Colombo stock index ended up 0.66 percent at 6,747.07, its highest close since Jan. 7. The bourse rose 0.47 percent during the week.

Foreign investors net bought 432.9 million rupees ($2.82 million) worth of shares on Friday, extending their year-to-date net inflow to 22.2 billion rupees worth of equities.

"Market is up with the continued foreign buying in big-cap shares," said Dimantha Mathew, head of research, First Capital Holdings PLC.

Brokers said local investors have been waiting for some clarity on the proposed inland revenue legislation, which some companies expect will result in higher cost of production.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was 1.2 billion rupees, well below this year's daily average of 928.8 million rupees.

Shares of Ceylon Tobacco Company Plc rose 3.07 percent, while Dialog Axiata Plc ended 3.45 percent higher and Hemas Holdings Plc rose 2.82 percent. 

($1 = 153.4500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lanka Treasuries yields steady across the board

ECONOMYNEXT – Yields on Sri Lankan Treasury Bills remained unchanged across maturities at Wednesday’s auction, the public debt department of the Central Bank said in a statement.

The yield on the 03-month bill was unchanged at 9.60 percent, that on the 06-month bill remained at 10.29 percent and the 01-year bill yield was also steady at 10.47 percent.

The debt office said it got bids worth Rs46 billion and accepted bids of Rs5.4 billion.

Sri Lankan banks lead in March quarter profits

ECONOMYNEXT – Sri Lanka’s banking sector remained the largest contributor to earnings of firms listed on the Colombo stock exchange in the March 2017 quarter, helped by interest rates spreads, First Capital Equities said in a research report.

Earnings were up by 7.1% in the quarter to Rs 65.5 billion from a year ago and 0.2% from the previous quarter, for 278 companies analysed by the brokerage, excluding a large one-off gain made by the LOLC group.

March quarter earnings grew 16.1% from a year ago to Rs 75.9 billion, including the one-off gain from LOLC amounting to about Rs 10.4 billion.

Earnings were dominated by healthy performance in the banks sector (+21%YoY) and diversified financial sector (+194%YoY) with higher margins and one-off gains from LOLC Group, the report said.

The interest rates spreads boosted the banking and diversified financials earnings, First Capital Equities said.

The banks sector made a profit of Rs 14.36 billion, up 21% from a year ago, and the diversified financial sector Rs 17.42 billion, up 194% from the year before, primarily led by expansion in margins and one-off gains from LOLC Group.

Big banks led by Sampath, whose earnings grew 30%, Commercial Bank of Ceylon, whose profits rose 17% and HNB with a 16% YoY growth in profit, jointly represented 70% of the sector earnings.

The Food Beverages & Tobacco Sector grew 28%YoY and Capital Goods Sector 42% YoY which was positively affected by healthy consumer spending, First Capital Equities said.

“Improved consumer demand, increased volumes and commodity price volatility led to a boost in profitability in Food, Beverage & Tobacco and Staple Food Sectors by 28% year-on-year,” First Capital Equities said.

“However, the earnings growth was partially offset by Telecommunication Sector, which fell 32% YoY, mainly owing to foreign exchange losses, and Real Estate Sector which dropped 59% YoY, mainly because of RIL reported a lower profit than the previous year when earnings were boosted by a fair value adjustment.

Sri Lanka vehicle registrations weak, tipper truck imports up

ECONOMYNEXT - Sri Lanka's vehicle registrations recovered in May but remained weak compared with last year owing to high taxes and interest rates and loan limits but tipper trucks imports rose to meet demand from revived construction projects, an equities research house said.

“The vehicle market experienced a rebound in May from a slow April due to the extensive New Year holiday, JB Securities said.

“Nevertheless, on a seasonally adjusted basis on most categories, demand remains weak due to high taxes, restrictions on LTV and high interest rates.”

The brokerage had noted a sharp fall in imports in February from the previous month with mini-trucks and three-wheelers used by small businesses among the worst hit by highly iniquitous and distortionary taxes and import restrictions

Total motor car registrations were 2,811 units in May up from 2,632 in April but significantly down from 3,664 units 12 months ago, JB Securities said.

Imports of mini-trucks and three-wheelers, used by small businesses, remained significantly lower in May 2017 than last year.

JB Securities said 3-wheeler registrations were 1,665 units in May up from 1,452 units in April but significantly down from 5,747 units 12 months ago.

For 3-wheelers the LTV (loan-to-value ratio) is 25% which is significantly below the normal rate of 50% imposed on motor cars. Financing share was 59.5% significantly down from the normal figure of 90%, JB Securities said.

Mini truck registrations recorded 272 units in May rebounding from the low figure of 187 units in April but significantly down from 1,123 units 12 months ago.

“This category was majorly impacted by the imposition of a minimum duty of LKR 1 million which was an almost 3x increase,” JB Securities said.

“The retail price of a Tata Ace truck increased by around 65% - this killed the market. Financing share was 82.7% down from the normal 90%. Permitted LTV is 90%, thus it cannot be an explanatory variable for the drop.”

Heavy trucks with a capacity of over 5MT recorded 122 units in May, marginally up from 116 units in April and also noticeably up from 76 units 12 months ago, JB Securities said.

“A noticeable trend is evident in pickup registrations of tipper trucks indicative of demand coming from the large construction projects like the Colombo Port City and highway projects,” it said.

Somap International to buy 51-pct stake in Sri Lanka’s Anilana Hotels

ECONOMYNEXT – Singapore’s Somap International Pte Ltd. is buy a 51% stake in Sri Lanka’s Anilana Hotels & Properties through an issue of new shares, a stock exchange filing said.

Anilana Hotels & Properties said it was in talks with Indian Ocean Group Pte Ltd. on behalf of their advisory client partner Somap International to invest up to 51% in the firm.

Somap International is to make a total investment of Rs667 million for 513 million shares at Rs1.30 each in Anilana Hotels & Properties subject to regulatory and shareholder approvals.

Anilana Hotels & Properties said it had sought fresh capital to reduce borrowings and complete existing projects.

Indian Ocean Group was now doing a due diligence of Anilana Hotels & Properties, the statement said.

Somap International started as shipping and trading company, particularly in ship reyling, but has diversified in to hospitality and real estate among other businesses like commodity trading, ecommerce, dairy and retail.

Ube buys 10-pct stake in Sri Lanka’s Tokyo Cement Company

ECONOMYNEXT – Ube Singapore Holdings Pte Ltd. has acquired a 10% stake in Sri Lanka’s Tokyo Cement Company (Lanka) in a deal worth Rs769.8 million, a stock exchange filing said.

Tokyo Cement Company said Ube Singapore Holdings Pte Ltd. bought 10,692,000 ordinary voting shares at Rs72 each.

Ube is a diversified Japanese group with the Singapore unit involved in sales of chemicals and building materials in Southeast Asia as well as materials purchasing.

Sri Lanka’s LAUGFS group to expand offshore gas trading

ECONOMYNEXT – Sri Lanka’s LAUGFS Gas group has begun hiring traders for its new energy trading unit in Dubai, aiming to extend its offshore presence beyond the existing downstream business to serve regional markets and being a maritime logistics provider.

Group Chairman and Chief Executive W K H Wegapitiya said SLOGAL Energy DMCC in Dubai Multi Commodity Center will be used with a liquid petroleum gas storage terminal being built at Hambanttota port and a growing fleet of gas carriers to expand its overseas business.

The construction of LAUGFS LPG Terminal at Hambantota, by China Huanqiu Contracting & Construction Corporation, will deliver storage capacity of 30,000 MT of LPG, most of which will be used to serve regional markets, he told shareholders in the firm’s annual report.

The company aims to “disrupt the current value chain to provide cost-effective solutions for other countries in the region,” Wegapitiya said.

Construction has been progressing on schedule; it's now over 25 percent complete, with phase I scheduled to be operational in the second half of 2018.

The group also invested $3.3 million in buying a new LPG vessel named Gas Courage, increasing its fleet to three vessels, which are mainly used for transporting the group’s LPG requirement to Bangladesh and Sri Lanka.

“The increased capacity enables us to transform SLOGAL Energy DMCC operations as we seek new markets for transporting LPG, expanding our business lines and footprint,” Wegapitiya said.

The report said LAUGFS group plans for SLOGAL “extend to exploiting trading opportunities outside the group's existing downstream businesses". “As such, we are in the process of appointing experienced traders to cater to regions such as, Africa, Latin America and European continents,” it said. “The vision of SLOGAL is to extend its services beyond being a sole LPG supplier to be an efficient and effective maritime logistics provider leveraging on the growth in maritime transportation globally.”

LAUGFS Managing Director U K Thilak De Silva said its LPG trading operations in the UAE, strengthened its position, procure about 10 percent of its requirements from Sri Lanka.

“This strategic positioning will enable us to realise our aspirations, expanding our offshore businesses to lucrative markets in the region and beyond. Capacity was expanded during the year supported by the Transportation & Logistics Sector of the Group, which is pivotal to growth and profitability in this sector,” he said.

Sri Lankan shares end slightly higher on foreign buying; tax bill weighs

Reuters: Sri Lankan stocks edged higher on Thursday led by shares of diversified companies as foreign buying continued, while concerns over a proposed tax bill weighed on overall investor sentiment.

The Colombo stock index ended 0.08 percent firmer at 6,702.53, edging up from its lowest close since June 19 hit on Wednesday.

Foreign investors net bought 22.1 million rupees ($144,161.77) worth of shares, extending their year-to-date net inflow to 21.7 billion rupees worth of equities.

"The overall market is stagnating at the same levels as the investors are awaiting specially the local investors are awaiting clarity on the inland revenue act," said Dimantha Mathew, head of research, First Capital Holdings PLC.

It will take a few weeks for the uncertainty to settle, he added.

Brokers said local investors have been waiting for some clarity on the proposed inland revenue act, which some companies expect will result in higher cost of production.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was 539.3 million rupees, well below this year's daily average of 926.5 million rupees.

Shares of C T Holdings Plc rose 5.96 percent, while Melstacorp Ltd gained 1.49 percent and Hemas Holdings Plc ended 0.61 percent higher. 

($1 = 153.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lankan shares end marginally lower; foreign buying continues

Reuters: Sri Lankan shares closed slightly lower on Wednesday as blue chips fell, but foreign buying capped losses while local investors continued to wait for more clarity on a new tax bill.

The Colombo stock index ended 0.09 percent weaker at 6,697.08, its lowest close since June 19. The bourse fell 0.05 percent last week.

Foreign investors net bought 208.6 million rupees ($1.36 million) worth of shares, extending their year-to-date net inflow to 21.7 billion rupees worth of equities.

"It was a flat market throughout the day and there were a lot of block trades. Foreign investors still continue to be net buyers," said Prashan Fernando, CEO, Acuity Stockbrokers.

"Government funds have been very quiet and we do not see many retail investors."

Brokers said local investors have been waiting for some clarity on the proposed inland revenue act, which some companies expect will result in higher cost of production.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was 1.1 billion rupees, well above this year's daily average of 929.8 million rupees.

Shares of Ceylon Tobacco Company Plc fell 3.84 percent, while Hatton National Bank Plc lost 0.96 percent.

($1 = 153.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lankan stocks end marginally lower; foreign buying caps fall

Reuters: Sri Lankan shares closed slightly lower on Tuesday as banking shares fell, but foreign buying capped losses while local investors waited for more clarity on a new tax bill.

The Colombo stock index ended 0.18 percent weaker at 6,703.18, its lowest close since June 19. The bourse fell 0.05 percent last week.

Foreign investors net bought 395.4 million rupees worth of shares, extending their year-to-date net inflow to 21.5 billion rupees worth of equities.

"Foreign investors are buying select shares. But local investors are still waiting for some direction, especially on new inland revenue act," said Jaliya Wijeratne, CEO, First Capital Equities (Pvt) Ltd.

In a disclosure to the bourse, Lanka Securities (Pvt) Limited said its client Ube Singapore Holdings Pte. Ltd bought 10.69 million shares in Tokyo Cement Company (Lanka) at 72 rupees each.

Subsequent to this transaction, the client has acquired 10 percent of the Tokyo Cement, it added. Shares in Tokyo Cement rose 5.7 percent.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was 1.7 billion rupees ($11.10 million), nearly two times this year's daily average.

Shares of Hatton National Bank Plc fell 1.92 percent while Ceylon Theatres Plc lost 5.63 percent and Nestle Lanka Plc closed 1.18 percent lower.

The markets were closed on Monday for Id-Ul-Fitr or the Ramzan Festival Day. 

($1 = 153.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Hayleys, Seylan Bank, Tokyo Cement in S&P Sri Lanka 20 Index

ECONOMYNEXT – The Colombo Stock Exchange (CSE) has included Hayleys, Seylan Bank and Tokyo Cement Company (Lanka) in the S&P Sri Lanka 20 index, which tracks the top 20 largest and most liquid stocks.

They replaced Asiri Hospital Holdings, Cargills Ceylon and Dialog Axiata a semiannual rebalance of the index, previously conducted annually, decided in March 2017 and taking place during June and December each year, the bourse said in a statement.

“The revision also established the inclusion of non‐voting ordinary shares listed by the respective companies of the S&P SL 20 Index, provided that such shares meet relevant liquidity requirements,” it said.

The exclusions and inclusions as announced by S&P Dow Jones Indices are effective from 19 June 2017.

The S&P SL 20 index includes the 20 largest companies by total market capitalization listed on the CSE that meet minimum size, liquidity and financial viability thresholds.

The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.

The CSE said the S&P SL 20 index has been designed in accordance with international practices and standards.

All stocks are classified according to the Global Industry Classification Standard (GICS®), which was co-developed by S&P Dow Jones Indices and MCSI and is widely used by market participants throughout the world.

To be eligible for inclusion, a stock must have a minimum float-adjusted market capitalization of 500 million Sri Lankan rupees, a six-month median daily value traded of rupees 0.5 million, have been traded at least 10 days of each month for the three months prior to the rebalancing reference date, and have positive net income over the 12 months prior to the rebalancing reference date.

Effective from 19 June 2017 the stocks in the S&P SL 20 in alphabetical order (including four non‐voting ordinary shares) are as follows.

No. Constituent CSE Ticker
1 Access Engineering PLC AEL.N0000
2 Aitken Spence PLC SPEN.N0000
3 Ceylon Cold Stores PLC CCS.N0000
4 Ceylon Tobacco Company PLC CTC.N0000
5 Chevron Lubricants Lanka PLC LLUB.N0000
6 Commercial Bank of Ceylon PLC COMB.N0000
7 Commercial Bank of Ceylon PLC Non-Voting COMB.X0000
8 DFCC Bank PLC DFCC.N0000
9 Hatton National Bank PLC HNB.N0000
10 Hatton National Bank PLC Non-Voting HNB.X0000
11 Hayleys PLC HAYL.N0000
12 Hemas Holdings PLC HHL.N0000
13 John Keells Holdings PLC JKH.N0000
14 Lanka Orix Leasing Company PLC LOLC.N0000
15 Melstacorp PLC MELS.N0000
16 National Development Bank PLC NDB.N0000
17 Nestle Lanka PLC NEST.N0000
18 People's Leasing & Finance PLC PLC.N0000
19 Sampath Bank PLC SAMP.N0000
20 Seylan Bank PLC SEYB.N0000
21 Seylan Bank PLC Non-Voting SEYB.X0000
22 Teejay Lanka PLC TJL.N0000
23 Tokyo Cement Company (Lanka) PLC TKYO.N0000
24 Tokyo Cement Company (Lanka) PLC Non-Voting TKYO.X0000

Sri Lanka’s Lanka Ceramics diversifies into quartz, palm oil

ECONOMYNEXT - Lanka Ceramics Group plans to diversify into quartz manufacturing for the ceramic tile industry, as well as into palm oil, Chairman Dhammika Perera has said.

The group, which includes tile factories, plantations and packaging, is committed to expanding its customer base further by including a wider range of ceramic product supplies, he told shareholders in the firm’s annual report.

Lanka Ceramic, the mining arm of the group, also intends to improve production capacity and the quality of its plants and quarries through investment in new technology and clay mining lands.

“We have embarked on the diversification of our product portfolio with a foray into quartz manufacturing for the ceramic tile industry,” Perera said.

Lanka Ceramic is also supplying crushed and powdered dolomite to the manufacturing industry as raw material and mineral fertilizer for the plantation sector, he said.

The group will also increase manufacturing capacity in tile and aluminium production.

“Our plans for the plantation business consist of diversification into other crops such as palm oil, while improving productivity,” Perera said.

Sri Lanka Royal Ceramics increasing production of porcelain tiles

ECONOMYNEXT – Sri Lanka’s Royal Ceramics is expanding capacity at its factory by 35 percent, with a 1.2 billion rupee investment in 2017, which will increase the production of porcelain floor tiles for which demand is high.

The expansion project is expected to be completed in October 2017, according to the group’s latest 2016-17 report.

The Royal Ceramics Lanka complex in Eheliyagoda now has a capacity of 5,000 square meters. It produces homogeneous full body porcelain tiles, where the pigment is in the entire tile body, making scratches less noticeable and better used for high traffic areas, along with glazed porcelain tiles under the ‘Rocell” brand.

Porcelain tiles are fired at higher temperatures for a longer time than ceramic, have higher feldspar content, and are much harder and more durable, and less prone to moisture and stain absorption than ceramic tiles, apart from being more expensive.

“One of the advantages of the expansion will be the factory’s ability to increase production of full body porcelain floor tiles for which there is high demand in the market,” the Royal Ceramics annual report said.

It said the project will include the addition of ‘Double Charge technology’ from Italy, where patterns are printed with a double layer of pigment, resulting in a long-wearing tile surface, suitable for heavy traffic commercial projects.

Sri Lanka 01-year Treasuries yield falls

ECONOMYNEXT – The yield on one-year Sri Lankan Treasury Bills fell three basis points to 10.47 percent at an auction on Wednesday from last week, the public debt department of the Central Bank said.

The yield on six-month Treasury Bills eased one basis point to 10.29 percent, while the three-month bill yield remained steady at 9.60 percent, a statement said.

The debt office said it got 62.7 billion rupees worth of bids and accepted bids worth 30 billion rupees.

Anilana’s inflated pricing catches up

By Duruthu Edirimuni Chandrasekera

Anilana Hotels and Properties PLC (Anilana) which has negotiated with Sampath Bank PLC on a repayment schedule to settle its dues some time ago found its public offer application rejected by the authorities, informed sources said.

The company whose Initial Public Offering (IPO) was rejected by the Securities and Exchange Commission (SEC) in 2012 (during the now SEC Chairman Thilak Karunaratne’s earlier tenure in the same capacity) ultimately managed to raise Rs. 486.6 million after the application was approved during the then SEC Chairman Nalaka Godahewa’s time in 2013.

The SEC rejected Anilana’s IPO after accounting watchdog Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) which monitors company financial statements revealed how inflated Anilana’s balance sheet was that it led to their IPO application being rejected, SEC sources told the Business Times.

These are part of the International Financial Reporting Standards (IFRS) and SLAASMB was concerned by IFRS 13 which relates to fair value measurements, the source added.

Anilana’s IPO application had re-valued property at a substantial valuation. SLAASMB, after consulting the Chief Valuer didn’t accept Anilana’s argument that these are the correct estimates as they had bought these lands at a cheap price during the war and now their value had escalated SLAASMB told the SEC not to allow the IPO to proceed.

Defying all this, the IPO was granted the green light a year later and the company is now submerged in debt.

Anilana said that they will settle their overdue portion of the credit facilities at Sampath with an initial lump sum payment and made settlements in two installment on 5th and 9th May 2017 while promising remainder of the overdue balance on or before 31st July 2017.

The company was targeting largely up-market traveller segment with plans to become the leading hotelier in the East Coast.

Anilana in a stock announcement on Monday said the directors already made arrangements to settle Sampath Bank PLC on or before next month end, but didn’t reveal the action plan.

Sampath had published four notices on their Board resolutions to auction mortgaged property in a national daily mid this month – two pertaining to Anilana alone and two regarding Anilana and Eastern Development Enterprises (Pvt) Ltd.

Values of defaulted credit facilities as at February, the notice said amounted to a total of Rs. 1.323 billion, Rs. 404 million, Rs. 130 million, Rs. 744 million and Rs. 45 million.

The firm whose principal activity is developing hotels and properties and has mortgaged land is in Nilaveli, Passikudah and Vakarai.

Last year Dhammika Perera, businessmen and entrepreneur, was trying to buy Anilana’s Trincomalee Property, but the deal full through after the price quoted was too high. The Anilana team wasn’t available for comment.

www.sundaytimes.lk

Constant Default Board entrees to be delisted from CSE

By Duruthu Edirimuni Chandrasekera

Sri Lanka’s capital market regulators are to take action against publicly listed firms that have a lackadaisical attitude towards rules and regulations.

The Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) are mulling to strike off/delist errant firms that constantly enter the default board of the CSE, informed sources say.

Most firms enter the Default Board owing to non submission of annual or interim accounts. “The SEC wants to de list these companies who repeatedly offend and get onto the Default Board,” a source told the Business Times. He said that they’re mulling delisting those that enter this board consecutively for three years.

In 2013, 17 companies were transferred to the Default Board with effect from September that year due to Non-Submission of Annual Report 2012/2013.

They were Asia Capital, The Autodrome, Ceylon & Foreign Trades, Central Investments & Finance, C T Holdings, East West Properties, Huejay International Investments, PC House, People’s Merchant Finance, Radiant Gems International, Standard Capital, Asia Asset Finance, Orient Garments, PC Pharma, PCH Holdings, Ramboda Falls and Tess Agro.

Anilana Hotel and properties, Tess Agro Swadeshi Industrial works and East West Properties were transferred last week.

The Asian Development Bank (ADB) with which the government entered into an agreement last year for a loan of US$250 million from the Ordinary Capital Resources Fund of the Bank to implement the Capital Market Development Programme (CMDP) has also strongly advocated this decision, he added.

Under the CMDP it is desired to develop efficient, stable and transparent capital markets that are a highly proficient conduit for resource mobilsation and that are grounded in a strong legal and regulatory framework. Increasing the capacity and size of the capital market through enhanced market facilitation, demand measures and supply measures are also identified as objectives of the CMDP. The ADB is pushing toward s progressive proposals.

The proposed loan by ADB will be disbursed in two tranches of approximately $125 million each, based on the accomplishment of the policy actions relevant for each of the tranches. The Ministry of Finance will be the executive agency of the programme whereas Central Bank, SEC, Sri Lanka Insurance Board and Sri Lanka Accounting and Auditing Standards Monitoring Board will be the implementing agencies.

www.sundaytimes.lk

Sri Lankan stocks end steady; cbank rate move, foreign buying boost sentiment

Reuters: Sri Lankan shares closed little changed on Friday, but sentiment was positive as the central bank kept key policy rates steady and as foreign investors bought diversified shares such as Hemas Holdings Plc and John Keells Holdings.

The banking regulator said the current monetary policy, which was in line with forecasts, was appropriate as it expected the economy to recover in the second half of the year.

The Colombo stock index ended 0.01 percent firmer at 6,715.33, but fell 0.05 percent on week.

"Unchanged policy rates could be one reason for the positive and healthy atmosphere that was there today," said Dimantha Mathew, head of research, First Capital Holdings PLC.

"It was a very active day with all retail, high networth institutional and foreign investors trading in the market."

Turnover was 2.7 billion rupees ($17.64 million), nearly three times this year's daily average of 921.1 million rupees.

Foreign investors net bought 257.7 million rupees ($1.68 million) worth of shares, extending the year to date net foreign inflow to 21.1 billion rupees worth of equities.

Shares of conglomerate John Keells ended 1.2 percent firmer, while Ceylinco Insurance Plc rose 6.7 percent and Hemas Holdings closed up 1.9 percent.

The markets will be closed on Monday for Id-Ul-Fitr or the Ramzan Festival Day. Normal trading will resume on Tuesday. 

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka Monetary Policy Review – June 2017 - Policy rates Unchanged

Monetary Policy Review: No. 4 – 2017 

With due consideration to the prevailing and evolving domestic and international macroeconomic environment, the Monetary Board, at its meeting held on 22 June 2017, was of the view that the current monetary policy stance is appropriate and decided to maintain the policy interest rates of the Central Bank of Sri Lanka at their present levels. 

The decision of the Monetary Board is consistent with the objective of maintaining inflation at mid-single digit levels over the medium term and thereby facilitating a sustainable growth trajectory. The rationale underpinning the monetary policy stance is set out below. 

According to the provisional estimates of the Department of Census and Statistics (DCS), the Sri Lankan economy has grown by 3.8 per cent (year-on-year) in the first quarter of 2017. Growth in the first quarter was weighed down by the impact of unfavourable weather conditions, particularly on agriculture related activities. The performance of industry related activities was largely driven by the continued expansion in construction, while services related activities recorded a moderate growth. The economy is expected to recover during the second half of the year. 

Following the increasing trend in the first quarter of 2017, year-on-year headline inflation, based on both Colombo Consumer Price Index (CCPI, 2013=100) and National Consumer Price Index (NCPI, 2013=100), moderated during the months of April and May, as envisaged. Core inflation has also displayed a similar trend. As the impact of the revisions to the tax structure and weather-related supply disruptions is expected to dissipate in the period ahead, inflation is projected to moderate to mid-single digits by the end of 2017, and stabilise thereafter.

Monetary expansion remained at elevated levels by end April 2017, driven by the expansion in domestic credit channelled to both the public and private sectors from the banking system. The growth of credit to the private sector continued to decelerate gradually. A further deceleration in the growth of credit to the private sector is anticipated, given the prevailing high nominal and real lending rates in the market. The recent expansion in credit obtained by state owned business enterprises (SOBEs) poses a risk to the behaviour of overall domestic credit, reflecting the need to address concerns in relation to the financial performance of key SOBEs. Meanwhile, a decline in net credit obtained by the government (NCG) was observed in the month of April 2017. The continuation of the government’s revenue based fiscal consolidation process and inflows to the government on account of foreign borrowings appear to have reduced the pressure on interest rates in the government securities market substantially. 

Despite improved export performance in March and April 2017, a sustained increase in import expenditure resulted in a wider cumulative trade deficit. Tourism related foreign exchange inflows grew on a cumulative basis, and the decline in tourist arrivals observed in the month of May 2017 is expected to be temporary. Workers’ remittances recorded a slowdown in the first four months of the year, and any further escalation of geopolitical tensions in the Middle East could adversely affect such inflows in the period ahead. A net foreign inflow was observed in the government securities market since March 2017, while inflows to the Colombo Stock Exchange (CSE) also displayed a positive trend. The Central Bank continued to absorb foreign exchange from the domestic market since March 2017 to build up international reserves. In line with these developments and the successful issuance of the International Sovereign Bond as well as the receipt of syndicated loan proceeds by the government, gross official reserves improved to above US dollars 7.0 billion by mid-June 2017. Meanwhile, the Sri Lankan rupee has depreciated against the US dollar by 2.3 per cent during 2017 up to 21 June. 

Against this backdrop, the Monetary Board decided to maintain the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 7.25 per cent and 8.75 per cent, respectively.

Sri Lankan shares slip from 17-mth high ahead of cbank rate review

Reuters: Sri Lankan shares fell on Thursday in low turnover, retreating from a 17-month closing high, as investors awaited the central bank's monetary policy review.

The central bank is expected to keep its key policy rates steady at more than three-year highs, a Reuters poll showed. The policy announcement is due on Friday at 0200 GMT.

Investors are worried of a possible rate hike, said Jaliya Wijeratne, CEO, First Capital Equities (Pvt) Ltd.

"Only a few counters traded today. Buyers want top blue chip John Keells Holdings, but sellers were not ready to sell at the price buyers wanted."

Keells, outperforming the overall index, ended 0.7 percent firmer.

The Colombo stock index fell 0.3 percent to 6,714.73, slipping from its highest close since Jan. 7, 2016 hit in the previous session.

Turnover was 495.5 million rupees ($3.2 million), about half of this year's daily average of 905.7 million rupees.

Foreign investors sold a net 14.6 million rupees ($95,362) worth of shares on Thursday, but they have been net buyers of 20.86 billion rupees of equities so far this year.

Shares of Ceylinco Insurance Plc lost 6.7 percent, while Hemas Holdings Plc ended 2.3 percent weaker, and BRAC Lanka Finance Plc fell 15.5 percent. 

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Amrutha Gayathri)

Sri Lankan shares close at 17-mth high ahead of cbank review

Reuters: Sri Lankan shares rose on Wednesday to a 17-month closing high, on gains in financials and food and beverage stocks, ahead of the central bank's policy review later in the week where interest rates are expected to be held steady.

The Colombo stock index gained 0.38 percent at 6,731.25, its highest close since Jan. 7, 2016.

Foreign investors bought a net 259.1 million rupees ($1.7 million) worth of shares on Wednesday, extending the year-to-date net foreign inflow to 20.88 billion rupees in equities.

Turnover was 903.2 million rupees ($5.9 million), compared with this year's daily average of 909.3 million rupees.

"We are getting into a bullish territory again after a slowdown," said Dimantha Mathew, head of research, First Capital Holdings PLC.

"Investors do not expect a rate hike this month and they wait for the policy rate announcement. The overall market is bullish with the hope of no rate hike."

The central bank is expected to keep its key policy rates steady on Friday, a Reuters poll showed.

Shares of conglomerate John Keells Holdings Plc rose 1.2 percent, while Hatton National Bank Plc ended 1.2 percent higher. 

($1 = 153.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares edge up, led by banks

Reuters: Sri Lankan shares rose on Tuesday as investors picked up banking and diversified stocks, but foreign investors turned net sellers after two days of buying.

The Colombo stock index ended 0.32 percent firmer at 6,705.45, with foreign investors selling a net 120.7 million rupees worth of shares. They have bought 20.7 billion rupees worth equities so far this year.

Turnover was 1.01 billion rupees ($6.59 million), more than this year's daily average of 909.3 million rupees.

"The market is slightly positive, but there was a dampener after a buying spree in top counters," said Prashan Fernando, CEO at Acuity Stockbrokers.

Shares of Hemas Holdings Plc rose 3.2 percent, while the country's biggest listed lender, Commercial Bank of Ceylon Plc, ended 1.4 percent higher.

Sri Lanka Telecom Plc climbed 2.2 percent, while Ceylon Tobacco Company Plc rose 0.9 percent. 

($1 = 153.1500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan shares hit near 1-wk closing low; Keells down 3 pct

Reuters: Sri Lankan shares hit a near one-week closing low in tepid trade on Monday, as selling in diversified and banking shares offset foreign inflow into equities.

The Colombo stock index ended down 0.52 percent at 6,684.02, its weakest since June 14.

Foreign investors net bought 26.7 million rupees ($174,396) worth of shares, extending the year-to-date net foreign inflow to 20.74 billion rupees.

Turnover was 846.3 million rupees ($5.53 million), less than this year's daily average of 899.4 million rupees.

"Market came down on selling in Keells," said Dimantha Mathew, head of research, First Capital Holdings PLC.

Shares of conglomerate John Keells Holdings Plc fell 3.03 percent, while the country's biggest listed lender, Commercial Bank of Ceylon Plc, ended 1.43 percent lower.

"Investors are (also) worried about growth numbers," he said.

Sri Lanka's economy grew 3.8 percent in the first quarter, slowing from the previous quarter's 5.3 percent, the state-run Census and Statistics Department said last week.

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan shares gain for 3rd day to hit near 4-wk closing high

Reuters: Sri Lankan shares rose on Friday for the third straight session to hit a near four-week closing high as investors picked up blue chip stocks.

The Colombo stock index ended 0.36 percent higher at 6,718.83, its highest close since May 22, and recorded its first weekly gain in four.

Analysts said investor reaction to slower economic growth in the first quarter was mixed.

Sri Lanka's economy grew 3.8 percent in the first quarter, slowing from the previous quarter's 5.3 percent, the state-run Census and Statistics Department said on Thursday.

"The first-half growth will be affected by the drought and the floods, but we expect a pick up in the second half," said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

"But slower growth this year will cause a higher loan-to-GDP ratio, which is a concern."

Turnover on Friday was 966.4 million rupees ($6.3 million), above this year's daily average of 899.4 million rupees.

Foreign investors were net buyers of 63.3 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.71 billion rupees.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh-food produce and staple food items, analysts said, after the recent floods and landslides, caused by the worst torrential rains in 14 years.

Shares in Hemas Holdings Plc ended up 4.2 percent, while Ceylon Tobacco Company Plc rose 1.2 percent. 

($1 = 152.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares hit 3-wk high as blue chips gain

Reuters: Sri Lankan shares rose on Thursday to hit a near three-week closing high as heavyweights John Keells Holdings Plc and Commercial Bank of Ceylon Plc gained.

The Colombo stock index ended 0.4 percent higher at 6,694.64, its highest close since May 26.

"We see encouraging signs with increased foreign participation," said Hussain Gani, deputy CEO of Softlogic Stockbrokers. "The local investors are also returning to the market resulting in healthy turnover level."

Foreign investors accounted for about 50 percent of the day's turnover of 1.88 billion rupees ($12.3 million), more than double this year's daily average of 899.4 million rupees.

Foreign investors, however, were net sellers of 55.6 million rupees worth of shares, snapping nine straight sessions of net buying. But they have been net buyers of 20.68 billion rupees worth of equities so far this year.

Sri Lanka's economy grew 3.8 percent in the first quarter, slowing down from the previous quarter's 5.3 percent, the state-run Census and Statistics Department said on Thursday after the markets closed.

Analysts said investors are still waiting to see the impact of the recent floods and landslides, caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Conglomerate John Keells rose 1.8 percent, while the country's biggest listed lender, Commercial Bank of Ceylon Plc , and Sri Lanka Telecom Plc gained 2.7 percent and 2.9 percent, respectively. 

($1 = 152.6500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares retreat from 5-1/2-week closing low; John Keells leads

Reuters: Sri Lankan shares on Wednesday bounced from their five-week closing low hit in the previous session, led by gains in conglomerate John Keells Holdings Plc and with foreign investors buying into the island nation's risky assets.

The Colombo stock index ended 0.32 percent firmer at 6,669.73, edging up from its lowest close since May 5 hit on Tuesday.

Last week, the bourse dropped 0.3 percent, posting its third consecutive weekly decline.

"Investors bought John Keells Holdings heavily and retail sentiment also improved," said Prashan Fernando, CEO, Acuity Stockbrokers in Colombo.

Turnover was 1.06 billion rupees ($6.95 million), above this year's daily average of 899.4 million rupees.

Foreign investors were net buyers of 18.9 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.7 billion rupees.

Analysts said investors are still waiting to see the impact of the recent floods and landslides, caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Conglomerate John Keells Holdings Plc rose 3.36 percent, while the country's biggest listed lender Commercial Bank of Ceylon Plc ended 0.89 percent higher.

($1 = 152.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares hit 5-1/2-week closing low despite foreign inflows

Reuters: Sri Lankan shares on Tuesday hit their lowest close in more than five weeks due to profit-booking in blue chips, although foreign investors actively bought into the island nation's risky assets.

Foreign investors were net buyers of 389.9 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.7 billion rupees.

The Colombo stock index ended 0.22 percent weaker at 6,648.40, its lowest close since May 5.

Last week, the bourse dropped 0.3 percent, posting its third consecutive weekly decline.

"There was healthy foreign buying and the turnover was also good. The index fell because retail investors are staying away until they see some direction," said Hussain Gani, deputy CEO, Softlogic Stockbrokers.

Turnover was 984.5 million rupees ($6.44 million), more than this year's daily average of 897.9 million rupees.

Analysts said investors are still waiting to see the impact of the recent floods and landslides, caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Shares of Sri Lanka Telecom Plc ended 2.5 percent down, Lion Brewery Plc closed 3.2 percent weaker, while the country's biggest listed lender Commercial Bank of Ceylon Plc ended 0.7 percent down.

($1 = 152.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares hit near 2-week closing low

Reuters: Sri Lankan shares on Monday ended at their lowest in near two weeks due to profit-booking in banking shares, but foreign inflows helped curb losses.

The Colombo stock index ended 0.09 percent weaker at 6,663.15, its lowest close since May 30.

Last week, the bourse dropped 0.3 percent, posting its third consecutive weekly decline.

"Foreign trade dominated the day. The net foreign trade is low, there is very less local participation as there is no new money coming into the market," said Dimantha Mathew, head of research, First Capital Holdings PLC.

Turnover was 841.6 million rupees ($5.51 million), little less than this year's daily average of 897.1 million rupees.

Analysts said investors are still waiting to see the impact of the recent floods and landslides, caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Foreign investors were net buyers of 65.7 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.3 billion rupees.

Shares of Bukit Darah Plc ended 4.27 percent weaker, Ceylinco Insurance Plc closed down 2.24 percent, Commercial Leasing & Finance Plc dropped 6.45 percent, while the country's biggest listed lender Commercial Bank of Ceylon Plc ended 0.07 percent down.

($1 = 152.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares snap four sessions of falls

Reuters: Sri Lankan shares closed slightly firmer on Friday, snapping four straight sessions of falls, on foreign investor buying in select stocks.

Analysts said investors are waiting to see the real impact of the recent floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended up 0.07 percent at 6,668.96, edging up from its lowest close since May 30 hit on Wednesday.

However, it fell 0.3 percent this week in its third straight weekly decline.

"Foreign trade boosted the market. They only bought in some select counters and they did not have enough quantities. Local investors are waiting for some directions amid uncertainty over how the Qatar issue will impact the Sri Lankan economy and oil prices," said Jaliya Wijeratne, CEO at First Capital Holdings PLC.

Turnover was 534.9 million rupees ($3.50 million), little higher than half of this year's daily average of 897.6 million rupees.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Foreign investors were net buyers of 131.3 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.2 billion rupees.

Shares of BRAC Lanka Finance Plc rose 18 percent, Bukit Darah Plc ended 6.3 percent firmer and the country's biggest listed lender, Commercial Bank of Ceylon Plc , gained 1.57 percent. 

($1 = 152.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares at 1-week closing low; foreign inflows cap losses

Reuters: Sri Lankan shares ended down for a fourth consecutive session on Wednesday, and hit their lowest close in more than a week, due to profit-booking in large-cap shares such as Ceylon Tobacco Company Plc, but foreign inflows helped curb losses.

Analysts said investors are waiting to see the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended down 0.08 percent at 6,664.00, its lowest close since May 30.

Turnover was 2.09 billion rupees ($13.70 million), its highest since May 24 and well above this year's daily average of 901.1 million rupees.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

"Today, the turnover was very healthy with some crossings. But despite that, the market ended weaker as investors are worried over the real impact of the flooding," said Yohan Samarakkody, head of research, SC Securities.

"The gloomy investor sentiment that we have seen during this week is mainly due to the floods, which will have an impact on the economy."

Foreign investors, however, were net buyers of 316.3 million rupees worth of shares, extending the year-to-date net foreign inflow to 20.1 billion rupees.

Ceylon Cold Stores Plc, which accounted for 55 percent of the day's turnover, ended down 5.6 percent.

Shares of Ceylon Tobacco Company slipped 1.11 percent, while the biggest listed lender Commercial Bank of Ceylon Plc declined 0.37 percent, Bukit Darah Plc shed 2.69 percent, Carson Cumberbatch Plc dropped 2.23 percent.

The markets will be closed on Thursday for a Buddhist religious holiday. Trading will resume on Friday.

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares end at 1-wk low on profit-taking

Reuters: Sri Lankan shares fell to a one-week closing low on Tuesday on profit-booking in blue-chip shares such as John Keells Holdings Plc while investors assessed the impact of the recent floods on exchange rate and inflation.

Analysts said it was also too early to evaluate the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended 0.1 percent weaker at 6,669.53, its lowest close since May 30.

Turnover was 468.3 million rupees ($3.07 million), around half of this year's daily average of 889.6 million rupees.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

"Some profit-taking is taking place. It's a small pullback which is good for the future run," said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

Foreign investors were net buyers of 134.4 million rupees worth of shares, extending the year-to-date net foreign inflow to 19.78 billion rupees.

Shares of conglomerate John Keells Holdings Plc fell 0.82 percent, while Melstacorp Plc declined 1.36 percent and Dialog Axiata Plc shed 0.84 percent. 

($1 = 152.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lankan shares fall on profit-taking in banks

Reuters: Sri Lankan shares fell in thin trade on Monday on profit-booking in banking stocks while investors assessed the impact of recent deadly floods on exchange rate and inflation.

Analysts said it is too early to evaluate the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended 0.19 percent weaker at 6,676.32, its lowest close since May 31. The bourse fell 0.13 percent last week, its second straight weekly drop.

Turnover was 395.4 million rupees ($2.59 million), less than half of this year's daily average of 893.8 million rupees.

Inflation could rise in the short term, especially due to crop damages and difficulties in distributing fresh food produce and staple food items, analysts said.

"It was a quiet market today. We expect the market to consolidate at these levels until we see some strong foreign buying coming into the market," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Foreign investors were net buyers of 101.8 million rupees worth of shares, extending the year-to-date net foreign inflow to 19.65 billion rupees.

Shares of Nanda Investment Plc fell 16.46 percent, Lanka ORIX Leasing Co Plc declined 1.86 percent, Ceylon Cold Stores Plc dropped 1.48 percent and Sri Lanka Telecom Plc shed 1.52 percent. 

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka vehicle registrations drop in April: JB Securities

(LBO) – Total vehicle registrations in Sri Lanka fell to 33,438 units in April from 40,021 in March, with declines in all major categories except three-wheelers and tractors, JB Securities said in a research note, likely affected by the holiday season.

Three-wheelers observed a 12 percent growth, month-on-month, to 1,452 units in April. Bajaj increased its market share to 94 percent from 90 percent, while the financing share for 3-wheelers increased to 65 percent from 57 percent in April.

The financing share is the number of vehicles that have been bought on finance.

Motorcar registrations decreased to 2,552 units in April, from 2,960 units in March. The figure is down from a massive 14,544 units recorded in September 2015, which analysts say was due to lower taxes and cost of financing.

Toyota Wigo’s momentum slowed down in April followed by a sharp drop in Perodua’s AG1GZ1 model.

The small car segment share jumped to 93 percent in April from 58 percent in the previous month. Financing share for brand-new motor cars increased slightly to 53.8 percent from 50.8 percent last month.

Electric car registration fell by almost 50 percent in April from the previous month. Most of the electric cars registered were Nissan Leaf.

Both brand-new and pre-owned Hybrid registrations fell, with Toyota Axio witnessing a drop. Suzuki Wagon R was slightly up. Financing share for hybrids increased to 52.1 percent from 50.9 percent.

Two-wheelers registered were 26,089, a 12.5 percent decrease, with units with less than 130CC seeing drop-in segment share from 84 percent to 78 percent.

Bajaj increased its brand share from 23 percent to 27 percent, while Honda observed a drop to 32 percent from 36.7 percent.

Vans, SUVs, lorries and buses too saw registrations drop in the month of April.

However, hand tractors and large tractors both saw more than 10 percent increases in registrations in April over March.

Sri Lankan shares fall on profit-taking in telecom shares; investors await direction

Reuters: Sri Lankan shares snapped two straight sessions of gains on Friday on profit-booking in telecom stocks such as Dialog Axiata Plc, while investors assessed the impact of deadly floods that hit rubber and tea plantations last week on exchange rate and inflation.

Analysts said it is too early to evaluate the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended 0.07 percent weaker at 6,689.07, edging down from its highest close since May 26 hit on Thursday. The bourse fell 0.13 percent during the week, recording its second straight weekly loss.

Turnover was 523.8 million rupees ($3.43 million), less than this year's daily average of 898.7 million rupees.

Inflation could rise in the short term, especially due to crop damages and difficulties in distributing fresh food produce and staple food items, analysts said.

"Market wants to find a direction, one day it's up another day it's down as investors are awaiting for the direction," said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

Foreign investors were net buyers of 66.5 million rupees worth of shares, extending the year-to-date net foreign inflow to 19.55 billion rupees.

Shares of Dialog Axiata Plc fell 2.5 percent while Carson Cumberbatch Plc dropped 5.7 percent and Lanka ORIX Leasing Company Plc ended 2.7 percent weaker. 

($1 = 152.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez)