Sri Lankan shares little changed; rising rates weigh

Reuters: Sri Lankan stocks closed slightly weaker on Wednesday, falling for a third straight session, as investor sentiment took a hit on uncertainty over foreign investments and rising yields on short-term government securities.

Yields on treasury bill auctions rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

The Colombo stock index ended down 0.02 percent at 6,185.01, stepping away from its highest close since Dec. 30, hit on Friday, when it gained after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

"There is no positive news and the market is going through a stalemate situation," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

"The interest rates are rising and uncertainty is hurting the market."

Investors are concerned over possible political uncertainty as the main coalition partners in government are contesting local polls, likely mid-year, separately, analysts said.

They are also concerned over delays in foreign investments as the economy is still in the recovery process after facing debt and balance of payments crisis last year.

Turnover stood at 171.4 million Sri Lankan rupees ($1.14 million) on Wednesday, lowest since Dec 27.

Foreign investors sold a net 70.6 million rupees worth of equities on Wednesday extending the year-to-date net foreign outflow to 1.63 billion rupees worth of shares.

Shares in Lanka Hospitals Corporation Plc fell 3.66 percent, while Aitken Spence Hotel Holdings Plc dropped 3.04 percent and Nations Trust Bank Plc slid 2.28 percent.

($1 = 150.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry

Colombo Stock Exchange Market Review – 18th Jan 2017

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Colombo Stock Exchange Trade Summary 18-Jan-2017

Colombo bourse closed on a mixed note on Wednesday in another lackluster trading session. ASI closed at 6,185.01 slightly down by 1.51 points (-0.02%) while S&P SL 20 index closed 5.93 points (+0.3%) higher at 3,497.27.

Gains in Asiri Hospital Holdings (closed at LKR 27.00, +3.9%), Ceylon Cold Stores (closed at LKR 750.00, +1.0%) and Cargills (Ceylon) (closed at LKR 190.00, +1.1%) supported S&P SL 20 index to close higher while the drop in prices in Dialog Axiata (closed at LKR 10.50, -0.9%) and Lanka Hospital (closed at LKR 65.80, +3.7%) dragged down the broader market. Out of the 183 scripts traded today, there were 69 gainers, 46 losers while 68 remained unchanged.

Turnover hit a 3-week low of LKR 171mn. The largest contribution to the turnover came from First Capital Holdings where the counter contributed LKR 65mn (38% of the total turnover) supported by a single crossing of 2.2mn shares at LKR 28.00. Other notable contributions were made by Seylan Bank (LKR 15mn), Chevron Lubricants (LKR 13mn) and Melstacorp (LKR 11mn).

Market activity was mostly concentrated on First Capital Holdings which closed unchanged at LKR 28.00 prior to its XD date. Further retail investor activity was seen Melstacorp (LKR 65.50, +0.5%), Access Engineering (LKR 25.90, +0.8%) and Hayleys Fabric (LKR 16.50, -0.6%).

Foreign investors were net sellers with a net outflow of LKR 71mn. Top net outflows were seen in First Capital Holdings (LKR 60mn), Chevron Lubricants (LKR 9mn), Commercial Bank (LKR 4mn) while top net inflow was mainly seen in Cargills (LKR 3mn). Foreign investor activity accounted for 29% of the day’s turnover.

Meanwhile, at Treasury bill auction today, rates advanced across the board. Three month yield advanced to 8.98% (+1bps) and six month yield increased by 16bps to 10.05% while one year Treasury bill rate advanced by 6bps to 10.37%. CBSL offered LKR 28bn worth Treasury bills and the auction was oversubscribed by 3.1 times with bids received amounting to LKR 86.7bn. It was decided to accept LKR 27.8bn worth of treasury bills.
Source: LSL