Bourse dips to over 8-month closing low; lenders fall

Reuters: Shares fell for a third straight session on Tuesday to their lowest close in more than eight months as investors offloaded banking and diversified stocks.

The Colombo Stock Index ended 0.33% weaker at 6,325.46, its lowest close since 11 April. The index was down 0.4% last week, its sixth consecutive weekly decline.

“Today we are seeing some selling in Sampath Bank after it announced a second rights issue for the year on top of the debenture issue,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings Plc.

“With holidays ahead, we think this dull period will continue.”

Samapath Bank Plc, in a filing to the Colombo stock exchange, said it will issue 50.1 million new shares. The bank will issue three shares for every thirteen existing shares held, to increase its tier 1 capital to comply with Basel III requirements.

The bank added it would also issue 50 million five-year debentures at an issue price of Rs. 100 apiece.

Sampath Bank Plc fell 4.9% while conglomerate John Keells Holdings Plc ended 0.7% lower and biggest listed lender Commercial Bank of Ceylon Plc lost 1.2%. Turnover was Rs. 357.6 million ($ 2.34 million), well below this year’s daily average of Rs. 933.4 million.

Foreign investors were net buyers of Rs. 26.7 million worth of shares on Tuesday, extending their year-to-date net equity purchases to Rs. 18.4 billion.

Plantation stocks came under pressure after the Russian agricultural safety watchdog said on Thursday that the country will place temporary restrictions on imports of all agricultural products from Sri Lanka, including tea, from 18 December.

Analysts said the Russian restrictions on tea could pose a threat to long-term tea prices and it could impact the earnings of plantation companies.