Bourse holds steady; political woes weigh

Reuters: Sri Lankan shares closed little changed yesterday in dull trade as political uncertainty ahead of a local election next month weighed on the sentiment, dealers said.

Sri Lanka will hold a long-delayed local government election on 10 February.

President Maithripala Sirisena at an election rally over the weekend said he was ready to form a new government with the Sri Lanka Freedom Party (SLFP), breaking away from the current coalition, in a comment that exacerbated worries about the future of the coalition government.

«The market is stagnated as most of the investors are on wait-and-see approach with election date coming closer,» said First Capital Holdings Head of Research Dimantha Mathew. «The sluggish trend will continue until the elections are over.»

The Colombo Stock index ended 0.03% weaker at 6,453.95, slipping from its highest close since 12 January hit, on 26 January. The index rose 0.19% last week, recording its first weekly gain in three.

Shares in conglomerate John Keells Holdings PLC were down 1.6%, while Dialog Axiata PLC lost 0.7%, and Sri Lanka Telecom PLC ended 2.5% weaker.

Turnover was Rs. 337.1 million ($2.19 million), well below last year›s daily average of Rs. 915.3 million.

Foreign investors bought a net Rs. 404,053 worth of shares on Monday, extending the year-to-date net foreign inflow to Rs. 4.02 billion worth of equities.