CSE returns to negative territory as weekly foreign selling picks up

Sri Lanka, Oct 12 (Capital Leads) – Sri Lankan shares ended the week in red despite recording gains last week after three consecutive sessions of losses as foreign selling in stocks increased with the country’s Central Bank keeping key policy rates unchanged amid US policy rate hikes.

ASPI sheds more than one percent: The broad market All Share Price Index (ASPI) lost more than 1.17 percent, to close at 5,815.03 points, 68.74 points lower than the previous week, while more liquid S&P SL20 Index declined 2.12 percent to reach 2,946.63 points on Friday, 63.97 points weaker than the previous week.

Net foreign outflow increases: Foreigners offloaded stocks worth a net LKR488.0 mn (USD2.9 mn) this week extending the foreign outflow since last week of September, when the US Federal Reserve increased its short term interest rates, to LKR1.0 bn (USD6.3 mn) as year-to-date net foreign outflow stood at LKR6.9 bn (USD40.6 mn).

However, Sri Lanka’s Central Bank in the following week kept its key policy rates, Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) unchanged at 7.25 percent and 8.50 percent respectively.

Turnover declines amid low off-board trades: Despite 79.0 mn shares changing hands compared to 75.2 mn of the previous week, weekly turnover declined by 23 percent from last week to stand at LKR1.6 bn (USD9.1 mn) as off-board negotiated transactions made up only 24 percent of total turnover.

Sampath bank leads weekly turnover generation; drops more than 6 percent: With 21 percent of contribution to the weekly turnover, Sampath Bank spearheaded the weekly turnover generation as the stock lost 6.5 percent in value driven by foreign selling.

Meanwhile, Hatton National Bank witnessed local investor interest gaining 0.5 percent over the week to contribute 18 percent to weekly turnover backed by by three crossings where 1.0 mn of its shares traded at LKR200.0 on Friday.

Furthermore, banks, finance and insurance sector led the sector-wise contribution to the turnover with 48 percent, followed by diversified holdings which made up 30 percent.

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