Bourse at three-month low on high rates; rupee up

Reuters: Sri Lankan stocks slipped to a three-month low on Monday in thin volume as high interest rates weighed on sentiment with investors shunning risky assets and moving in to high-yielding Government securities.

The Colombo Stock Exchange’s main index ended 0.25 per cent or 13.54 points, weaker at 5,337.71, its lowest close since 4 September. “There is negative sentiment among local investors,” said one broker, who declined to be identified, adding that high interest rates had led to a lack of liquidity.

The yield for 364-day T-bills gained for a seventh consecutive week at an auction on Wednesday. Analysts say investors have been shifting to fixed deposits from equities since the Central Bank kept key policy rates at three-year highs on 9 November.

The day’s turnover was 173.3 million rupees ($ 1.33 million), well below this year’s daily average of 900 million rupees. Foreign investors bought a net 7.96 million rupees worth of shares, extending the net foreign inflow this year to 35.5 billion rupees.



The rupee closed firmer at 129.30/35 to the dollar compared with Friday’s close of 130.24/28 on foreign inflow into a foreign bank, dealers said.