Reuters: Sri Lankan shares edged lower on Friday in moderate volume as selling in late trade weighed on the market after the central bank cut its economic growth estimate.
Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy told reporters on Friday, adding that the earlier estimate was “ambitious”.
Foreign investor selling and concerns about lower economic growth weighed on sentiment, analysts said.
The Colombo stock index ended 0.15 percent weaker at 6,108.71, a day after it posed its sharpest daily gain since Nov. 21. It hit its lowest close since March 30, 2017 on Wednesday, and has declined for an 18th session in 21 through Friday. The index fell 1.4 percent for the week.
“Investors are still confident and there are margin calls forcing investors to sell their stakes,” said Prashan Fernando, CEO at Acuity Stockbrokers.
“There was some bargain hunting, but the late selling brought down the index.”
Before the market opened, the central bank kept the key interest rates unchanged at its policy review.
Foreign investors sold equities for a 12th consecutive session, extending the foreign outflow to 1.43 billion rupees ($8.99 million).
They net sold equities worth 161 million rupees on Friday, extending the year-to-date foreign outflows to 2.23 billion rupees.
Turnover was 753.5 million rupees, less than this year’s daily average of 921 million rupees.
Distilleries Co of Sri Lanka Plc, which jumped over 10 percent on Thursday, ended 5.4 percent weaker, while leading mobile phone operator Dialog Axiata fell 0.7 percent.
Investors are waiting for some positive news both on the economic and political fronts, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.
The International Monetary Fund (IMF) said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.
Ratings agency Moody’s said last week a strengthening U.S. dollar since mid-April has increased the credit risk of several emerging markets, including Sri Lanka, due to currency depreciation.
Moody’s said a strong U.S. dollar would also lead to a drop in foreign exchange reserves of countries such as Argentina, Ghana, Mongolia, Pakistan, Sri Lanka, Turkey, and Zambia.
Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy told reporters on Friday, adding that the earlier estimate was “ambitious”.
Foreign investor selling and concerns about lower economic growth weighed on sentiment, analysts said.
The Colombo stock index ended 0.15 percent weaker at 6,108.71, a day after it posed its sharpest daily gain since Nov. 21. It hit its lowest close since March 30, 2017 on Wednesday, and has declined for an 18th session in 21 through Friday. The index fell 1.4 percent for the week.
“Investors are still confident and there are margin calls forcing investors to sell their stakes,” said Prashan Fernando, CEO at Acuity Stockbrokers.
“There was some bargain hunting, but the late selling brought down the index.”
Before the market opened, the central bank kept the key interest rates unchanged at its policy review.
Foreign investors sold equities for a 12th consecutive session, extending the foreign outflow to 1.43 billion rupees ($8.99 million).
They net sold equities worth 161 million rupees on Friday, extending the year-to-date foreign outflows to 2.23 billion rupees.
Turnover was 753.5 million rupees, less than this year’s daily average of 921 million rupees.
Distilleries Co of Sri Lanka Plc, which jumped over 10 percent on Thursday, ended 5.4 percent weaker, while leading mobile phone operator Dialog Axiata fell 0.7 percent.
Investors are waiting for some positive news both on the economic and political fronts, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.
The International Monetary Fund (IMF) said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.
Ratings agency Moody’s said last week a strengthening U.S. dollar since mid-April has increased the credit risk of several emerging markets, including Sri Lanka, due to currency depreciation.
Moody’s said a strong U.S. dollar would also lead to a drop in foreign exchange reserves of countries such as Argentina, Ghana, Mongolia, Pakistan, Sri Lanka, Turkey, and Zambia.
($1 = 159.1000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)
