Sri Lanka shares fall about 10 pct in 2016; Addresses in rupiah, the expected rates
Shares in Sri Lanka fell Friday, posting an annual decline of about 10 percent in thin trade due to year-end vacations, as investors awaited central bank instructions on interest rates and Of the rupee.
The central bank is more likely to maintain its key interest rates at a policy meeting later in the day, even as some economists expect a further tightening to ease the pressure on the rupee after a hike in rates by the Federal Reserve Earlier this month, according to a Reuters poll.
Speculation about the possible depreciation of the rupee and rate rises weighed on sentiment, brokers said.
The Colombo stock index closed 0.28 percent below 6.228.26, down 9.7 percent in 2016, its second consecutive annual decline.
In dollar value terms, market capitalization fell by 13 percent, making Sri Lanka perform worse than emerging Asian markets such as Malaysia, Thailand, Indonesia and Singapore.
Stockbrokers said that factors such as the inability to attract foreign direct investment and lack of investor confidence due to investment in some fiscal policies have weighed on the market this year.
"Come with positive expectations, although it will be a tough year for everyone," said a broker asking not to be named.
"Politically, the government must prove its policies, while the private sector will see some challenges in the midst of an unstable external environment possible."
Foreign investors sold 6.4 crore shares on Friday but bought 633.5 billion rupees ($ 4.24 billion) in 2016, compared with net sales of 4.43 billion rupees a year.
The turnover was 202 million rupees, less than one-third of the daily average for that year of 737.2 million rupees. Last year's average daily was 1.06 billion rupees.
Ceylon Tobacco Co Plc fell 0.6 percent, while Lion Brewery (Ceylon) Plc lost 3 percent.