Bourse falls to over 2-week closing on heavy foreign selling
Friday, 7 February 2014 00:47
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Reuters: Shares fell on Thursday to a more than two-week closing low as foreign investors sold the most equities in over two years.
The main stock index fell 0.12%, or 7.13 points, to 6,168.50, its lowest closing level since 21 January.
Foreign investors sold a net Rs. 2.96 billion worth of shares, the highest since 7 September 2011 and reversing the year-to-date foreign inflow to a net Rs. 1.57 billion outflow.
“The market is down on foreign selling as a part of sell-off in emerging markets and it was absorbed by local investors. But how sustainable it will be is the question,” said a stockbroker.
Foreign investors bought Rs. 22.88 billion worth of stocks last year.
Shares of conglomerate John Keells Holdings PLC fell 1.38% to Rs. 229, while top mobile phone operator Dialog Axiata fell 1.09% to Rs. 9.10. Foreign investors sold a net 9.8 million and 10 million shares in Keells and Dialog, respectively.
They also sold 5.6 million shares in top listed lender Commercial Bank of Ceylon PLC, which rose 2.16% to Rs. 123.
Keells said in a disclosure to the exchange after market hours that it had divested its 24.6% stake in unlisted Central Hospitals Ltd., for Rs. 1.59 billion with a capital gain of Rs. 662 million.
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.
Some 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.
Stockbrokers said retail and institutional investors were active in the market after interest rates on treasury bills eased at a weekly auction on Wednesday to multi-year lows, making fixed-income assets unattractive.
The index has risen 4.32% so far this year, following a 4.8% gain in 2013. It fell in the previous two years.
The day’s turnover was Rs. 3.75 billion, well above last year’s daily average of about Rs. 828.4 million.
