Sri Lankan stocks fall to 12-wk low; political uncertainty weighs

Nov 27 (Reuters) - Sri Lankan stocks fell to a 12-week closing low on Thursday as investors pulled back over worries the defection of some ruling party members would result in a hung parliament after the Jan. 8 presidential polls.

The main stock index closed down 0.89 percent or 63.83 points at 7,115.89, its lowest since Sept. 5, after falling 1.6 percent earlier in the session.

Eight loyalists from President Mahinda Rajapaksa's United People's Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since Rajapaksa announced the snap poll last week. Sirisena has resigned to contest against Rajapaksa as the consensus candidate of a united opposition.

"The crossovers have raised concern over the political stability of the government and some believe it could result in a hung parliament, resulting in political instability," a stockbroker said on condition of anonymity.

"At the moment, it is not clear who will win. But if we see a massive defection in parliament towards one side, then it will be clear who is going to win and that will help the market rebound."

Continued buying by foreign investors, low interest rates and hopes of better corporate earnings pushed the bourse into the overbought zone by Nov. 18, before it slipped on political uncertainty. The bourse is near the oversold region since Friday, Thomson Reuters data showed.

Thursday's turnover was 1.32 billion rupees ($10.08 million), exchange data showed, less than this year's daily average of 1.44 billion rupees. Foreign investors bought a net 320.1 million rupees worth of stocks, extending purchases during the year to 20.12 billion rupees, exchange data showed.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 4.40 percent, leading the losers, while fixed line telephone operator Sri Lanka Telecom Plc declined 3.51 percent.

($1 = 131.0000 Sri Lankan rupee)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Colombo bourse extended the losses on Thursday as core index lost 63.83 points (-0.89%) to end at 7,115.89. S&P SL 20 index lost 47.55 points (-1.18%) to end at a nearly one month low of 3,977.15. All share price index declined by 285.73 or -3.9% so far during the week while S&P SL 20 index declined by 150.11 points or -3.6%.

Price depreciation in counters such as Commercial Bank (closed at 160.10, -4.7%), Sri Lanka Telecom (closed at LKR 47.00, -3.1%) and Hatton National Bank (closed at 191.50, -2.3%) contributed negatively to the market performance. Further sectors such as Information Technology, Footwear & Textiles and Construction & Engineering slumped during the session.

Daily market turnover was LKR 1.3bn. Access Engineering topped the turnover list with LKR 236mn supported by several crossing where 4.4mn shares changed hands at LKR 37.00 per share. Aggregate value of Access Engineering crossings represented 12% of the total market turnover. Accordingly Dialog Axiata (LKR 128mn) and John Keells Holdings (LKR 74mn) recorded next best contributions to the market turnover. Other crossings were recorded in Hatton National Bank non-voting as 0.3mn shares traded at LKR 144.00 per share. Total crossings represented 16% of the market turnover.

Losers surpassed the gainers 191 to 43, while 46 equities remained unchanged. 20 counters touched 52wk low prices while only Pan Asia Power reached 52wk high price level. Cash map declined to 46% from 50%.

Shares of Lanka Cement continued to attract heavy investor interest during the session followed by Lanka IOC and Access Engineering.

All the banking sector counters declined during today’s trading session. Amana Bank closed at LKR 4.90, -3.9%, National Development Bank closed at LKR 234.00, -3.6%, DFCC Bank closed at LKR 210.60, -0.2%, Sampath Bank closed at LKR 229.90, -0.1%), Nations Trust closed at LKR 91.00, -4.1%, HDFC Bank closed at LKR 61.50, -2.4%, Union Bank closed at LKR 23.30, -3.3%, Sanasa Development Bank closed at LKR 86.00, -2.9%, Seylan Bank closed at LKR 90.50, -6.6% and Pan Asia Bank closed at LKR 23.50, -4.1%.

Foreign investors were net buyers for the 16th consecutive day with net inflow of LKR 320mn. Foreign participation was 22%. Year to date net foreign inflows passed the LKR 20bn mark to record LKR 20.1bn.

Net foreign inflows were seen in counters such as Access Engineering (LKR 193mn), Dialog Axiata (LKR 125mn) and Hemas Holdings (LKR 49mn) while net foreign outflow was mainly seen in John Keells Holdings (LKR 16mn).

Dialog Axiata made an announcement to CSE regarding an incorporation of a wholly owned subsidiary of Dialog Axiata under the name of Digital Holdings Lanka (Private) Limited. This company will operate as Dialog Group’s investments holding company.

Further Sampath Bank announced that the bank obtained the approval of CSE for listing the 70mn rated unsecured redeemable subordinated debentures at LKR 100.00 each.

Thanks Reds.

hursday, 27 November 2014 21:27 Posted by Imaduddin

COLOMBO: Sri Lankan stocks fell to a 12-week closing low on Thursday as investors pulled back over worries the defection of some ruling party members would result in a hung parliament after the Jan. 8 presidential polls.
The main stock index closed down 0.89 percent or 63.83 points at 7,115.89, its lowest since Sept. 5, after falling 1.6 percent earlier in the session.
Eight loyalists from President Mahinda Rajapaksa's United People's Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since Rajapaksa announced the snap poll last week. Sirisena has resigned to contest against Rajapaksa as the consensus candidate of a united opposition.
"The crossovers have raised concern over the political stability of the government and some believe it could result in a hung parliament, resulting in political instability," a stockbroker said on condition of anonymity.
"At the moment, it is not clear who will win. But if we see a massive defection in parliament towards one side, then it will be clear who is going to win and that will help the market rebound."
Continued buying by foreign investors, low interest rates and hopes of better corporate earnings pushed the bourse into the overbought zone by Nov. 18, before it slipped on political uncertainty. The bourse is near the oversold region since Friday, Thomson Reuters data showed.
Thursday's turnover was 1.32 billion rupees ($10.08 million), exchange data showed, less than this year's daily average of 1.44 billion rupees. Foreign investors bought a net 320.1 million rupees worth of stocks, extending purchases during the year to 20.12 billion rupees, exchange data showed.
Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 4.40 percent, leading the losers, while fixed line telephone operator Sri Lanka Telecom Plc declined 3.51 percent.