Sri Lankan shares edge down as net foreign outflow continues

Sri Lanka, Sep 27 (Insights Equity) – The Colombo Stock Exchange (CSE) ended the session in red today, with both indices recording losses as net foreign outflow continued for the seventh straight session following another interest rate hike by the US Federal Reserve.

ASPI returns to negative territory: Declining 18.21 points, the All Share Price Index (ASPI) stood at 5,869.31 points at today’s close, as the index shed 0.31 percent from yesterday where it first recorded a gain in three straight sessions.

Meanwhile, more liquid S&P SL20 dropped 10.27 points to close the session at 3,009.31 points, 0.34 percent weaker than the previous session.

With no off-board contribution, market turnover improves: While there were no crossings in the market today, the turnover improved by 32 percent from yesterday to stand at LKR419.9 (USD2.5 mn), close to half of the the year-to-date average daily turnover of LKR788.5 mn (USD4.7 mn).  The number of shares transacted increased by nearly a tenth from the previous session to reach 13.6 mn.

Foreign outflow accelerates as Fed hikes rates: Net foreign outflow grew more than 50 percent from yesterday as overseas investors offloaded stocks worth a net LKR110.5 mn (USD0.7 mn).

With LKR depreciating 9.0 percent since January 2018, year-to-date net foreign outflow has exceeded LKR6.0 bn (USD36.1 mn), which could accelerate even further as the US Federal Reserve, the Central Bank of the US, raised its benchmark overnight lending rate by 0.25 percent yesterday.

Investment Trusts led by GUAR dominates turnover generation: Meanwhile, Ceylon Guardian Investment Trust (GUAR) led the turnover generation with a contribution of 25 percent followed by John Keels Holdings and Ceylon Investments which, driven by foreign selling, made up 23 percent and 14 percent respectively.

With 40 percent of contribution, investment trusts spearheaded the sector-wise contribution to the turnover while diversified holdings made up 28 percent.

Moreover, The Finance Company and Singhe Hospitals were two of the sharpest price gainers in the market today while national Development Bank and Access Engineering were among the most actively traded counters for the day.


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