Sri Lankan shares hit near 6-week closing high; turnover slumps to 4-year low

April, 17, 2018

Reuters - Sri Lankan shares rose slightly on Monday and posted their highest close in nearly six weeks in light trade, as many market participants were on extended holidays after the Sinhala-Tamil New Year festival over the weekend, brokers said.

Turnover was 101.9 million rupees ($653,833.81), the lowest since March 17, 2014, and less than a 10th of this year’s daily average of 1.16 billion rupees.

“Many people are on vacation and we expect the same to continue until the end of this week,” said Prashan Fernando, CEO, Acuity Stockbrokers.

The Colombo stock index rose for a fourth straight session and ended 0.19 percent higher at 6,496.44, its highest close since Feb. 1. The index gained 0.44 percent last week.

Brokers said the market was awaiting some political stability after President Maithripala Sirisena suspended the parliament until May 8.

The president will reshuffle the cabinet soon, cabinet spokesman Rajitha Senaratne said on Wednesday, after some ministers defected and voted for the no confidence motion against Prime Minister Ranil Wickremesinghe.

Foreign investors sold shares worth a net 8.1 million rupees on Monday, extending the net foreign outflow from equities to 1.36 billion rupees.

Shares of Distilleries Company of Sri Lanka Plc rose 6.2 percent, while fuel retailer Lanka IOC closed 5.2 percent firmer.

The central bank unexpectedly cut its key lending rate by 25 basis points on Wednesday, as policy makers sought to revitalise an economy growing at its weakest pace in 16 years and facing heightened political uncertainty.