(Colombo) REUTERS: Sri Lankan shares closed steady yesterday, while the turnover slumped to a near three-month low as many investors remained on the sidelines due to a lack of bullish news amid concerns over political uncertainty, stockbrokers said.
Turnover stood at Rs.142.7 million (US$ 896,357), its lowest since April 16, and less than a sixth of this year’s daily average of Rs.909 million.
The Colombo stock index ended flat at 6,077.37, hardly changed from Monday’s close.
“All this is due to the political uncertainty and no catalysts to move the market,” said Dimantha Mathew, head of research, First Capital Holdings.
“However, the good news is that lower turnover levels mean the sellers are not desperate to sell and the market is likely to recover soon.”
The index hit its lowest close since March 30, 2017, on Wednesday and has declined for a 19th session in 22 through Monday. It dropped 1.4 percent for the week, sliding for a seventh straight week. Lower economic growth outlook has also hit sentiment after the Central Bank cut its estimate, analysts said.
Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy told reporters on Friday, adding that the earlier estimate was “ambitious”. Foreign investor are selling and concerns about lower economic growth weighed on sentiment, analysts said.
They net bought equities worth Rs.1.7 million yesterday, but the bourse has seen an year-to-date foreign outflow of Rs.2.25 billion. Gains led by Ceylon Tobacco Co, which closed 0.6 percent firmer, were offset by losses in Softlogic Holdings , which ended 3.4 percent lower.
Investors are waiting for some positive news both on the economic and political fronts, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.The International Monetary Fund (IMF) said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.