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Sri Lankan shares hit near 15-mth closing low on margin calls, foreign selling


JUNE 27, 2018

COLOMBO, June 26 (Reuters) – Sri Lankan shares fell for a third straight session on Tuesday and posted their lowest close in nearly 15 months as margin calls triggered selling and as foreign investors continued to offload the island nation’s risky assets.

The Colombo stock index ended 0.52 percent weaker at 6,188.05, its lowest close since 4 April 2017.

“Margin calls are coming up and selling is accelerating. Foreign selling is also dragging the market,” said Dimantha Mathew, head of research, First Capital Holdings.

Foreign investors net sold equities worth 26.4 million rupees, extending the year-to-date foreign outflows to 978.7 million rupees this year.

Turnover was 541.2 million rupees ($3.42 million), well below this year’s daily average of 931.9 million rupees.

Shares of Sri Lanka Telecom Plc lost 5.8 percent, while conglomerate John Keells Holdings Plc ended 1.3 percent weaker, Hatton National Bank Plc closed 2.2 percent down and Ceylon Tobacco Company Plc ended 0.8 percent lower.

Finance Minister Mangala Samaraweera said last week the economy was likely to grow about 4.5 percent this year, below a central bank estimate of 5 percent.

The International Monetary Fund (IMF) on Wednesday said Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.

Stock, bond and foreign exchange markets are closed on Wednesday for a public holiday. ($1 = 158.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Vyas Mohan)