Sri Lankan shares little changed amid political concerns

Colombo stock market

Sri Lankan shares were little changed on Monday as investors awaited clarity on the political front and the timing of a parliamentary election as concerns over political stability weighed on sentiment, stockbrokers said.

The main stock index ended down 0.05 percent at 7,284.76.

“There was some profit-taking in those counters which went up last week,” said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd. “Turnover is low as investors are awaiting the announcement of the parliamentary election.”

Analysts said a new stable government after the parliament election with some strong economic policy measures would boost confidence.

Turnover was 763.3 million rupees ($5.71 million), below this year’s daily average of about 1.13 billion rupees.

Foreign investors were net buyers on Monday, ending three straight sessions of outflows. They bought 77.5 million rupees worth of shares on Monday, extending the year-to-date net foreign inflow to 5.94 billion rupees.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 2.02 percent, while shares in Distillers Sri Lanka Plc fell 3.11 percent.

Analysts expect banking and financial shares to gain due to rising private sector credit growth, which grew 13.9 percent on-year in March from 12.6 percent in February.

Political uncertainty due to the Prime Minister Ranil Wickremesinghe-led UNP not having a parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.6 percent since the rate cut. ($1 = 133.7000 Sri Lankan rupees)