Shares recover from 12-week low in dull trading

REUTERS: Sri Lankan shares edged up yesterday from a 12-week closing low hit in the previous session, but trading volume slumped to a more than 2-1/2-year low as investors awaited cues from the government budget and five-year plan as well as corporate earnings.

Sri Lanka’s quarterly earnings season started two weeks ago, but most of the firms listed locally reports in late October or early November. The national budget is scheduled to be presented on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.29 percent or 18.63 points higher at 6,436.97, edging up from Monday’s close of 6,418.34, its lowest since August 1. The index fell 0.54 percent last week, its second straight weekly loss.
Tuesday’s turnover was Rs.135.9 million, its lowest since March 17, 2014 and lower than a fifth of this year’s daily average of around Rs.736.2 million.

“It was a very dull day. It’s a waiting game now and nothing is happening,” said Dimantha Mathew, Head of research at First Capital Equities (Pvt) Ltd.
“The equity market is dead and all are waiting for the government’s five-year plan and the budget.”
Stockbrokers said the market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on October 17, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his Prime Minister.
This is likely to delay one of the promises of Sirisena’s coalition government, eliminating corruption, and could hurt business confidence, analysts said.

Foreign investors bought a net Rs.17.6 million worth of equities, in the eleventh straight session of net foreign inflows and bringing the total net inflows to RS.1.23 billion over that period.
They have sold a net RS.1.74 billion worth of shares this year. Shares in Ceylon Tobacco Company rose 2 percent, while Carson Cumberbatch rose 1.65 percent.