Sri Lankan shares fall to over 2-wk closing low on foreign selling

Thu Feb 6, 2014 7:37am EST

COLOMBO, Feb 6 (Reuters) - Sri Lankan shares fell on
Thursday to a more than two-week closing low as foreign
investors sold the most equities in over two years.
    The main stock index fell 0.12 percent, or 7.13
points, to 6,168.50, its lowest closing level since Jan. 21.
    Foreign investors sold net 2.96 billion rupees worth of
shares, the highest since Sept. 7, 2011 and reversing the
year-to-date foreign inflow to a net 1.57 billion rupees
outflow.
    "The market is down on foreign selling as a part of sell-off
in emerging markets and it was absorbed by local investors. But
how sustainable it will be is the question," said a stockbroker.
    Foreign investors bought 22.88 billion rupees worth of
stocks last year.
    Shares of conglomerate John Keells Holdings PLC 
fell 1.38 percent to 229.00 rupees, while top mobile phone
operator Dialog Axiata fell 1.09 percent to 9.10
rupees. Foreign investors sold net 9.8 million and 10 million
shares in Keells and Dialog, respectively. 
    They also sold 5.6 million shares in top listed lender
Commercial Bank of Ceylon PLC, which rose 2.16 percent
to 123.00 rupees.
    Keells said in a disclosure to the exchange after market
hours that it had divested its 24.6 percent stake in unlisted
Central Hospitals Limited for 1.59 billion rupees with a capital
gain of 662 million rupees.
    Analysts said investors have been waiting for directions
from December-quarter earnings and an upcoming UNHRC session in
March where Sri Lanka is facing a US-sponsored resolution for
alleged human rights violations. 
    Some stockbrokers said investors will shrug off political
risks from renewed pressure by the United States to bring a
fresh resolution against Sri Lanka at the UNHRC meeting in
March, because the market had been expecting the worst.
    Stockbrokers said retail and institutional investors were
active in the market after interest rates on treasury bills
eased at a weekly auction on Wednesday to multi-year lows,
making fixed-income assets unattractive. 
    The index has risen 4.32 percent so far this year, following
a 4.8 percent gain in 2013. It fell in the previous two years.
    The day's turnover was 3.75 billion rupees, well above last
year's daily average of about 828.4 million rupees.
($1 = 130.6350 Sri Lanka rupees)

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by
Subhranshu Sahu)