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Last Updated : 2024-04-20 00:00:00
REUTERS: Sri Lankan shares fell yesterday, posting a yearly decline of about 10 percent, in thin trade due to year-end holidays, while investors waited for directions from the Central Bank on the rupee and interest rates.
The Central Bank is most likely to keep its key interest rates steady at a monetary policy meeting later in the day, even as some economists expect further tightening to ease pressure on the rupee following a rate hike by the U.S. Federal Reserve earlier this month, a Reuters poll showed.
Speculation over possible depreciation of the rupee and rate hikes weighed on sentiment, stockbrokers said.
The Colombo stock index closed 0.28 percent lower at 6,228.26, declining 9.7 percent in 2016, its second straight yearly fall.
In terms of dollar value, market capitalisation fell 13 percent, making Sri Lanka a worse performer than emerging Asian markets like Malaysia, Thailand, Indonesia and Singapore.
Stockbrokers said factors like failure to attract foreign direct investments and lack of investor confidence due to a reversal in some budget policies weighed on the market this year.
“We are going with positive expectations, though it is going to be a challenging year for all,” a stockbroker said asking not to be named.
“Politically the government has to prove its policies while the private sector will see some challenges amid possible volatile external environment.”
Foreign investors sold a net Rs.6.4 million of equities yesterday, but purchased a net Rs. 633.5 million ($4.24 million) in 2016, compared with a net sell of Rs.4.43 billion last year.
Turnover stood at Rs. 202 million, less than a third of this year’s daily average of Rs.737.2 million. Last year’s daily average was Rs.1.06 billion.
Large cap Ceylon Tobacco Co Plc fell 0.6 percent, while Lion Brewery (Ceylon) Plc lost 3 percent.
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