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Shares end steady; turnover slumps to over 2-1/2 mth low


9 June 2016 10:28 am - 0     - {{hitsCtrl.values.hits}}


REUTERS: Sri Lankan shares closed steady yesterday as positive sentiment after an International Monetary Fund (IMF) loan approval was offset by concerns over rising interest rates and foreign fund outflows. Turnover was Rs.390.8 million, the lowest since March 19, and nearly half of this year’s daily average of around Rs.782.5 million.

The benchmark Colombo stock index ended 0.03 percent higher at 6,526.12. “We don’t expect a lot until the interest rates are down,” said First Capital Equities (Pvt.) Ltd Head of Research Dimantha Mathew. Treasury bill yields have risen between 16 and 36 basis points to near three-year highs in the last three weekly auctions through yesterday despite the Central Bank leaving key policy rates steady for a third straight month on May 20.

The IMF’s executive board approved a three-year US $ 1.5 billion loan to support Sri Lanka’s economic reform agenda, the global lender said on Saturday. Investors are concerned about foreign outflows, with overseas investors offloading a net Rs.38.2 million worth of shares yesterday, extending the year-todate net foreign outflow to Rs.5.7 billion. Stockbrokers said a rise in interest rates could be detrimental to risky assets if they jumped beyond 12 percent.

The average prime lending rate (AWPR) edged up 8 basis points to 10.23 percent in the week ended June 3. Ceylon Cold Stores PLC rose 1.90 percent, Ceylon Tobacco Company PLC gained 0.91 percent, Sri Lanka Telecom PLC added 0.76 percent, while conglomerate John Keells Holdings PLC increased 0.32 percent.

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