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Sri Lankan stocks close almost unchanged amid selling by foreigners

February, 28, 2018

Reuters - Sri Lankan shares closed almost unchanged on Tuesday amid selling by foreign investors and some concerns about political stability, dealers said.

Shares hit a more than three-week high last week after two key parties in the ruling coalition decided to remain in the ruling coalition, allaying fears of a government collapse.

President Maithripala Sirisena reshuffled his cabinet on Sunday, appointing his prime minister as the law and order minister, after the governing coalition suffered a series of defeats in local elections earlier this month.

“A foreign fund is exiting. While some foreigners who do not want to take the risk is exiting, other foreigners who are willing to take the risk are coming in, that’s why the market is holding on,” said Dimantha Mathew, head of research, First Capital Holdings.

The Colombo stock index ended 0.01 percent weaker at 6,559.42, its lowest close since Feb. 15. The index rose 0.18 percent last week.

Turnover stood at 2.2 billion rupees ($14.21 million) on Tuesday, more than two times of this year’s daily average of 970.9 million rupees.

Foreign investors sold a net 171.2 million rupees worth of shares, but they have been net buyers of 6.2 billion rupees worth of equities so far this year.

Shares of AIA Insurance Lanka Plc ended 8.6 percent weaker, while Nestle Lanka Plc ended down 1.83 percent.