CSE extends gain to 1-week closing high

Thursday, 17 May 2018 00:29 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares rose for a second straight session yesterday (16 May) and closed at a one-week high, with Ceylon Tobacco Co PLC leading the gains.

The Colombo stock index ended 0.42% firmer at 6,483.47, its highest close since 9 May. It hit a five-week low on Monday (14 May).

“There was slow local buying on select shares. Still we do not see a bounce-back,” said First Capital Equities CEO Jaliya Wijeratne.

Turnover stood at Rs. 455.2 million ($2.88 million), less than half of this year’s daily average of Rs. 1.01 billion.

Foreign investors sold net equities worth Rs. 7.3 million, extending the year-to-date net foreign outflow to Rs. 669.6 million worth of shares.

Meanwhile, recent fuel price hikes weighed on investor sentiment, stockbrokers said.

State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on 10 May in response to rises in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices the same day.

Shares of Ceylon Tobacco rose 3.3%, Softlogic Holdings PLC closed 4.4% firmer and Lanka ORIX Leasing Co PLC climbed 1.8%.

The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.50 per dollar yesterday on importer demand for the US currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, also hurt sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.