CSE extends fall to near 15-month closing low

Friday, 29 June 2018 00:10 - - {{hitsCtrl.values.hits}}

Reuters: Shares declined for a fourth straight session yesterday and posted their lowest close in nearly 15 months, as foreign investors continued to offload the island nation’s risky assets, while month-end settlements also weighed on the Bourse.

The Colombo stock index ended 0.11% weaker at 6,181.48, its lowest close since 4 April 2017.

“Foreign selling has not stopped yet which is pushing the market down,” said Dimantha Mathew, head of research, First Capital Holdings.

“Today we saw some foreign buying and that absorbed the selling pressure to some extent. Margin calls are also there.”

Foreign investors net sold equities worth Rs. 196.1 million ($ 1.24 million), extending the year-to-date foreign outflows to Rs. 1.2 billion this year.

Turnover was Rs. 1.3 billion, more than this year’s daily average of Rs. 934.9 million.

Shares of Cargills (Ceylon) Plc fell 4.4%, conglomerate John Keells Holdings Plc ended 0.7% weaker, Bukit Darah Plc declined 3.7% and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, slipped 0.7%.

Finance Minister Mangala Samaraweera said last week the economy was likely to grow about 4.5% this year, below a central bank estimate of 5%.

The International Monetary Fund (IMF) said on 20 June Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.

Ratings agency Moody’s said on Wednesday a strengthening US 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 dollar would also lead to a drop in foreign exchange reserves of countries such as Argentina, Ghana, Mongolia, Pakistan, Sri Lanka, Turkey, and Zambia.

Sri Lankan markets were closed on Wednesday for a public holiday.