Last Updated : 2019-07-17 10:55:00

Shares fall to 2-week low on foreign selling

13 September 2018 12:01 am - 0     - {{hitsCtrl.values.hits}}


(Colombo) REUTERS: Sri Lankan shares fell for a third straight session yesterday and marked a two-week closing low as foreign investors sold blue-chips after a research report said the country was facing risk of an exchange rate crisis.

Analysts said investors were worried after Japanese bank Nomura Holdings ranked Sri Lanka among seven emerging market economies that were at risk of an exchange rate crisis.

However, the Central Bank in a statement said that Nomura Holdings has made a serious computational error with regard to Sri Lanka’s external vulnerability and its short-term external debt is nowhere near the US $ 160 billion figure that Nomura analysts quoted.

Nomura later corrected the figure to US $ 7.5 billion, but said its analysts have used the same figure to calculate the country’s Damocles score for the analysis and thus it is unchanged.

The Colombo stock index ended 0.59 percent weaker at 6,059.00, its lowest close since August 29. It had risen 0.6 percent last week in its third straight weekly gain.

“Investors were worried over the Nomura ranking, but they corrected external debt figure and accepted it was wrong. We expect people to build confidence back,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.

Analysts also said the increase in fuel prices also weighed on the market.

Sri Lankan fuel retailers raised gasoline and diesel prices for a third time in four months on Tuesday due to higher global oil prices and a weaker rupee, a finance ministry official said.

Turnover stood at Rs.967.8 million, more than this year’s daily average of Rs.793.9 million.

Meanwhile, investors are also awaiting cues from the national budget which the government is set to unveil in November.

Shares of Ceylon Tobacco Company PLC fell 1.8 percent, while Distilleries Company of Sri Lanka ended 2.2 percent weaker. Conglomerate John Keells Holdings PLC closed 0.8 percent down and Sampath Bank PLC lost 1.8 percent.

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