Shares hit more than 2-week closing low led by banks

Saturday, 17 December 2016 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Shares fell for a third straight session on Friday to close at their lowest in more than two weeks, as a dollar rally to a 14-year peak after an interest rate increase by the U.S. Federal Reserve earlier this week kept investors subdued.

The 25-basis-point rate increase could hike borrowing costs of foreign capital for Sri Lanka and force the coalition government to borrow locally at higher interest rates, which could also result in movement of money from equities, analysts said.

The Fed also signalled a faster pace of increases in 2017, partly as a result of changes anticipated under a Donald Trump presidency, with the U.S. Central Bank hinting at three rate hikes next year instead of the two foreseen as of September.

The Colombo stock index ended 0.27% weaker at 6,268.61, its lowest close since 30 November. The bourse fell 0.88% for the week, its second weekly fall.

A block deal in Seylan Bank Plc boosted turnover, with dealers saying state-owned Bank of Ceylon sold 13 million shares to a foreign investor.

“A sizeable crossing of Seylan Bank boosted the turnover. Other than the Seylan trade, there was nothing. The market is getting slower by the day with the holiday mood,” said First Capital Equities Ltd. Head of Research Dimantha Mathew.

Shares of Seylan Bank Plc ended steady, while Lanka ORIX Leasing Company Plc fell 4.49% and conglomerate John Keells Holdings Plc lost 1.14%.

Sri Lanka Telecom Plc dropped 2.61%, while Commercial Leasing and Finance Plc fell 5.88%.

Turnover stood at Rs. 1.86 billion, well above this year’s daily average of Rs. 753.4 million.

Foreign investors bought a net Rs. 1.35 billion worth of shares on Friday, extending the year-to-date net foreign inflow to Rs. 1.87 billion worth of equities.