Shares fall to near 22-month low on rising rates

REUTERS: Sri Lankan shares fell for an eight straight session yesterday, marking their lowest close in about 22 months as rising domestic interest rates and global economic worries dampened investor sentiment.

Sri Lanka’s main stock index ended down 0.53 percent at 6,220.82, its lowest close since April 29, 2014. It has fallen 2.87 percent in the last eight sessions to yesterday.

“Things are not looking bright. Investor confidence is very bad at the moment as they do not see a direction and the economy is getting weaker day by day,” said First Capital Equities (Pvt.) Ltd Research Manager Dimantha Mathew.

The key index has fallen 9.8 percent this year through yesterday, amid a rise in market interest rates.
Yields on 91-day T-bills rose 13 basis points at a weekly auction yesterday to a more than two-year high, signalling a further rise in market interest rates. The Central Bank rejected all bids at 182-day and the 364-day T-bill auctions which is also at more than two-year highs.

Turnover was 425.6 million rupees, less than this year’s daily average of 711 million rupees.

Foreign investors were net buyers of 91.9 million rupees worth of shares yesterday. But they have sold a net 201.7 million rupees worth of shares so far this year.

Shares of Sri Lanka Telecom PLC fell 0.26 percent, while Distillers Sri Lanka PLC lost 2.32 percent and conglomerate John Keells Holdings PLC declined 0.44 percent.