Shares recover from 12-wk low in dull trading

Wednesday, 26 October 2016 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Shares edged up on Tuesday from a 12-week closing low hit in the previous session, but trading volume slumped to a more than 2-1/2-year low as investors awaited cues from the government budget and five-year plan as well as corporate earnings.

Sri Lanka’s quarterly earnings season started two weeks ago, but most of the firms listed locally reports in late October or early November.

The national budget is scheduled to be presented on 10 November.

The benchmark index of the Colombo Stock Exchange ended 0.29 percent or 18.63 points higher at 6,436.97, edging up from Monday’s close of 6,418.34, its lowest since 1 August. The index fell 0.54% last week, its second straight weekly loss.

Tuesday’s turnover was Rs. 135.9 million ($ 921,355.93), its lowest since 17 March 2014 and lower than a fifth of this year’s daily average of around Rs. 736.2 million.

“It was a very dull day. It’s a waiting game now and nothing is happening,” said Dimantha Mathew, head of research at First Capital Equities Ltd.

“The equity market is dead and all are waiting for the Government’s five-year plan and the budget.”

Stockbrokers said the market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on 17 October, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.

This is likely to delay one of the promises of Sirisena’s coalition government, eliminating corruption, and could hurt business confidence, analysts said.

Foreign investors bought a net Rs. 17.6 million worth of equities on Tuesday, in the eleventh straight session of net foreign inflows and bringing the total net inflows to Rs. 1.23 billion over that period.

They have sold a net Rs. 1.74 billion worth of shares this year.

Shares in Ceylon Tobacco Company rose 2%, while Carson Cumberbatch Plc rose 1.65%.