Stocks steady in dull trade; political woes weigh

REUTERS: Sri Lankan shares ended steady yesterday in thin trade amid political uncertainty after both parties in the ruling coalition suffered defeats in a local election earlier this month.

Turnover stood at Rs.288.4 million, well below the daily average of Rs.849.7 million.

The Colombo stock index ended 0.03 percent firmer at 6,565.63, its highest close since February 9.

Shares in Melstacorp Ltd rose 7 percent, while Trade Finance PLC gained 16.8 percent.

The index fell 0.13 percent last week, after gaining for three straight weeks.

“Very slow day as investors are waiting for political direction after the election debacle,” said First Capital Holdings Research Head Dimantha Mathew.

Prime Minister Ranil Wickremesinghe’s centre-right United National Party (UNP) and President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party (SLFP) were routed by a party backed by former President Mahinda Rajapaksa in local polls on February 10, plunging the government into crisis. Since the results, both parties have locked horns on how best to continue in the government. Sirisena’s party wants to form its own government, his party ministers have said, while Wickremesinghe’s party has said it is in the process of forming its own government.
Wickremesinghe, addressing the media on Friday said that the government will continue with a reshuffle of the cabinet. Foreign investors bought a net Rs.20.7 million worth of shares yesterday, extending the net foreign buying to Rs.5.5 billion worth of equities so far this year.