Saturday, 24 May 2014 00:00
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Reuters: Stocks ended at a two-week low on Friday as investors booked profits in large-cap shares, but foreign investors bought into the country’s risky assets as sentiment got a boost from the Central Bank’s decision to hold policy rates at multi-year lows.
The main stock index ended down 0.16%, or 9.86 points, at 6,280.31, its lowest close since 8 May.
Stockbrokers expect the market to gain in the near future due to lower interest rates after the Central Bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.
The exchange witnessed a net foreign inflow of Rs. 296.7 million ($2.28 million) on Friday, extending year-to-date net foreign inflow to Rs. 1.79 billion. The day’s turnover stood at Rs. 803.6 million, less than this year’s daily average of 1.03 billion.
Shares of Ceylon Tobacco Company PLC fell 1.86% to Rs. 1.061.9 a share in low volume.
Shares in Lanka IOC PLC, the Sri Lankan arm of Indian Oil Corp, fell 3.23%, after the company posted a 10.6% fall in net profit for the three months ended 31 March.
The market has been on a rising trend since mid-March as many investors were compelled to return to the stock market because low interest rates have made fixed-income assets less attractive, stockbrokers said.
However, analysts have raised concerns over sluggish economic growth due to lower credit growth and consumer spending.
Despite a multi-year low interest rate regime, data showed private sector credit grew 4.3% in March from a year earlier, the slowest expansion since May 2010, while imports in February fell 6.2% on the year.
On Monday, Central Bank Governor Ajith Nivard Cabraal said Sri Lanka’s private sector credit growth would pick up to around 15% by the end of this year and continue to improve through 2016.
