Stock hold steady; budget, policy rate decision in focus

REUTERS: Sri Lankan shares closed steady yesterday ahead of a long weekend, with investors awaiting the national budget presentation and the Central Bank’s policy rate decision.

The Colombo stock index closed 0.04 percent weaker at 6,621.47. The index rose 0.1 percent for the week. Both currency and stock markets will be closed for a Buddhist holiday today.

“There was heavy interest in Sampath Bank and investors are just holding until the next week’s budget,” said Prashan Fernando, CEO at Acuity Stockbrokers.

Finance Minister Mangala Samaraweera will present the 2018 budget on Nov. 9.

Sentiment has been mixed on September-quarter corporate earnings as lower consumer spending due to tight monetary and fiscal policies is expected to have hurt the quarterly performance.

Market heavyweight John Keells Holdings posted a 1 percent fall in its September-quarter net profit.
Sampath Bank climbed 1.6 percent, while Keells gained 0.3 percent.

Fernando said the market was hoping for policies that might result in improved consumer spending in the budget.

Sri Lanka’s Central Bank is expected to keep its key interest rates steady on Tuesday to support the sluggish economy despite a pick-up in inflation amid strong credit growth, a Reuters poll showed.

Foreign investors bought shares net worth Rs.148.6 million (US$967,763), extending the year-to-date net inflows to Rs.20.4 billion in equities. The session’s turnover was Rs.992.1 million, higher than this year’s average daily turnover of Rs.942.8 million.