Bourse fall to near 5-week closing low; foreign selling drops
Thursday, 13 February 2014 00:18
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REUTERS: Sri Lankan shares fell to their lowest close in nearly five weeks on Wednesday in thin trading volume as investors sold large caps to book profit.
The market came under pressure even though foreign selling in the island nation’s risky assets dropped sharply.
Foreign investors sold net Rs. 10.6 million worth of shares on Wednesday, much less than the daily average Rs. 1.15 billion ($ 8.79 million) in the past four sessions, Stock Exchange data showed.
The bourse witnessed a net foreign outflow of Rs. 4.62 billion in the last five sessions through Wednesday.
The main stock index lost 0.47%, or 28.67 points, at 6,084.48, its lowest close since 10 January. It has lost 2.6% in the last seven sessions through Wednesday.
Analysts said the foreign selloff in emerging markets was the reason for the exit of some offshore funds with profits.
Market heavyweight Ceylon Tobacco Company fell 1.62% to Rs. 1,240.
The bourse has seen Rs. 3.23 billion of foreign outflow so far in 2014, after enjoying a net inflow of Rs. 22.88 billion last year.
Analysts say local investors are active in the market after interest rates on treasury bills eased to multi-year lows, making fixed-income assets unattractive.
The index, however, has risen 2.90% so far this year, following a 4.8% gain in 2013. It fell in the previous two years.
The day’s turnover was Rs. 548.6 million, less than this year’s daily average of about Rs. 1.24 billion. The market has witnessed an average Rs. 1.71 billion in the seven straight sessions through Tuesday, which analysts attributed to active local investment funds and institutional investors.
Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations.
Stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst.
