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Shares fall to near 19-month low on rising rates

19 January 2016 03:36 am - 0     - {{hitsCtrl.values.hits}}

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REUTERS: Sri Lankan share index fell about 2 percent to near 19-month low yesterday due to rising yields and as investors sold their stocks to settle margin trading, brokers said.

The main stock index ended 1.89 percent, or 121.59 points weaker, at 6,324.61, its lowest close since June 27, 2014.The market has lost about 8.3 percent this year through yesterday’s close due to foreign outflows triggered by global concerns related to China’s economy.

“On the one hand, large quantities of foreign selling are available in the market. 

But on the other hand nobody is coming forward to buy the market,” said First Capital Equities (Pvt.) Ltd Research Manager Dimantha Mathew.

“The fall has already triggered margin calls for everybody. There is also lack of positive news and there is nothing concrete taking place on the government side, while interest rates are also slowly on the rise though the Central Bank is tightly holding them,” he said.

Foreign investors sold a net Rs.151.3 million worth of equities yesterday, extending net outflows to Rs.2.36 billion so far this year. Last year, the island nation saw a net outflow of Rs.4.43 billion.

Stockbrokers said some foreign funds have already started selling blue chips including the market heavyweight John Keells Holdings and lender Commercial Bank of Ceylon.

The turnover was at Rs.812.7 million.

The yield on 91-day T-bill rose 40 basis points to an over three-month high of 6.78 percent in three weekly auctions since the December 30 monetary policy announcement.

Conglomerate John Keells fell 2.7 percent, while Lanka Orix Leasing Co lost 7.2 percent, dragging the overall index.
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