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Sri Lanka shares fall when Keells shows sales

Shares in Sri Lanka declined on the first trading day of 2017 as investors sold the heavyweight market John Keells Holdings Plc and other blue chips in the midst of concerns about a rupee's weakening and rising Interest rate.

John Keells Holdings Plc conglomerate decreased 3.5 percent and accounted for 67.6 percent of Monday's turnover of 329.2 million rupees ($ 2.2 million).

The Colombo stock index fell 0.6 percent to 6192.87. The stock market fell by 9.7 percent in 2016, its second consecutive annual decline.

"Investors sell Keells because a wealthy investor has sold large quantities. So investors have sold stocks speculating that Keells will further decline," said a stockbroker, asking not to be named.

"It was also the sale of foreign Keells in the last month."

In dollar terms, the Sri Lanka stock market fell 13 percent in 2016, making it perform worse than emerging Asian markets such as Malaysia, Thailand, Indonesia and Singapore.

Stockbrokers said Sri Lanka's failure to attract foreign direct investment and lack of investor confidence due to a reversal of some fiscal policies weighed on the market and the rupee, which fell 3.9 percent In 2016 and still low.

The central bank kept Friday's benchmark interest rates for the fifth consecutive month as expected, saying that credit growth has responded to one of the previous adjustment measures. However, government borrowing costs are rising, as the recent rise in US interest rates increases the risk of capital outflows from emerging markets such as Sri Lanka, which increases the pressure on the rupee.

Foreign investors sold 26.4 crore shares on Monday.

The shares of Trans Asia Hotel Plc fell by 12.1 percent while Sri Lanka Telecom Plc fell by 2.8 percent and shares of Commercial Bank of Ceylon Plc fell by 1.2 percent

 
 

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