Sri Lankan shares hold steady; political woes weigh

January, 30, 2018

Reuters - Sri Lankan shares closed little changed on Monday in dull trade as political uncertainty ahead of a local election next month weighed on the sentiment, dealers said.

Sri Lanka will hold a long-delayed local government election on Feb. 10.

President Maithripala Sirisena in an election rally over the weekend said he was ready to form a new government with his Sri Lanka Freedom Party (SLFP), breaking away from the current coalition, in a comment that exacerbated worries about the future of the coalition government.

“The market is stagnated as most of the investors are on wait-and-see approach with election date coming closer,” said Dimantha Mathew, head of research at First Capital Holdings.

“The sluggish trend will continue until the elections are over.”

The Colombo Stock index ended 0.03 percent weaker at 6,453.95, slipping from its highest close since Jan. 12 hit on Friday. The index rose 0.19 percent last week, recording its first weekly gain in three.

Shares in conglomerate John Keells Holdings Plc were down 1.6 percent, while Dialog Axiata Plc lost 0.7 percent, and Sri Lanka Telecom Plc ended 2.5 percent weaker.

Turnover was 337.1 million rupees ($2.19 million), well below last year’s daily average of 915.3 million rupees.

Foreign investors bought a net 404,053 rupees worth of shares on Monday, extending the year-to-date net foreign inflow to 4.02 billion rupees worth of equities.