Sri Lankan shares snap 2 days of gains; rising interest rates weigh on mkt

Reuters: Sri Lankan shares closed slightly weaker on Thursday, snapping two straight sessions of gains and hovering near a more than 10-month closing low hit earlier this week, as concerns over rising market interest rates weighed on sentiment.

The Colombo stock index ended 0.04 percent lower at 6,094.15. The index hit its lowest close since March 2016 on Monday.

"Interest rates are the real concern," said Prashan Fernando, CEO at Acuity Stockbrokers. "If the central bank raises the rates, it is going to hit the market."

The central bank on Tuesday kept its key rates steady for a sixth straight month, but flagged possible "corrective measures" in the months ahead in a sign further tightening might be on the cards to temper inflation pressures and safeguard a fragile rupee.

Sri Lankan stocks, which have been declining since October, have been hit by political uncertainty arising from a decision of the ruling coalition parties to contest local polls separately, and on worries over a rise in market interest rates.

Yields on treasury bills rose 2-8 basis points at a weekly auction on Tuesday, hovering at more than four-year high.

Market turnover was 719.3 million rupees ($4.78 million) ($3.37 million) on Thursday, more than this year's daily average of 620.2 million rupees.

Foreign investors, who have been net sellers of 703.8 million rupees worth of shares so far this year, net bought 322.2 million rupees worth of equities.

Shares of John Keells Holdings Plc rose 0.34 percent, while Sri Lanka Telecom Plc fell 2.51 percent and Dialog Axiata Plc declined 1.85 percent.

Sri Lanka's stock and foreign exchange markets will be closed on Friday for a Buddhist religious holiday. 

($1 = 150.5000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 9th Feb 2017

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Colombo Stock Exchange Trade Summary 09-Feb-2017

Colombo bourse concluded the session on mixed note despite foreign inflows. All Share index shed 2.24 index points (-0.04%) to close at 6,094.15 while 20-scrip S&P SL index edged up 3.30 index points or 0.09% to end at the session 3,488.50.

Two telcos, Dialog Axiata (LKR 10.60, -1.9%) and Sri Lanka Telecom (LKR 35.00, -2.5%) contributed negatively to the index performance while gains in Hemas Holdings (LKR 105.90, +1.3%) and John Keells Holdings (LKR 146.00, +0.3%) eased the impact.

Daily market turnover was 719mn. John Keells Holdings was the top contributor to the turnover with LKR 374mn underpinned by a single crossing of 0.3mn shares at LKR 146.00. Ceylon Cold Stores (LKR 68mn), Hemas Holdings (LKR 48mn) and Seylan Bank (LKR 45mn) made notable contribution. Single crossing was seen in Seylan Bank where 0.5mn shares changed hands at LKR 97.00.

Market breadth was negative where out of 191 stocks, 63 slipped and 48 advanced. High investor activity was seen in John Keells Holdings, Richard Pieris and Teejay Lanka. Richard Pieris declared an interim dividend of LKR 0.60 per share.

Foreign investors stood on buy side with a net foreign inflow of LKR 322mn. Foreign participation for the day was 52%. Net foreign inflows were seen in John Keells Holdings (LKR 345mn), Hemas Holdings (LKR 27mn), Tokyo Cement non-voting (LKR 6mn) while net foreign outflow was mainly seen in Seylan Bank (LKR 43mn).

Please note Colombo Stock Exchange will be closed tomorrow (10th February 2017) due to public holiday.

Source: LSL