COLOMBO May 23 Sri Lanka stocks ended at a
two-week low on Friday as investors booked profits in large-cap
shares, but foreign investors bought into the island nation's
risky assets as sentiment got a boost from the central bank's
decision to hold policy rates at multi-year lows.
The main stock index ended down 0.16 percent, or 9.86
points, at 6,280.31, its lowest close since May 8.
Stockbrokers expect the market to gain in the near future
due to lower interest rates after the central bank kept key
rates at multi-year lows on Tuesday for the fourth straight
month, as expected.
The exchange witnessed a net foreign inflow of 296.7 million
rupees ($2.28 million) on Friday, extending year-to-date net
foreign inflow to 1.79 billion rupees.
The day's turnover stood at 803.6 million rupees, less than
this year's daily average of 1.03 billion.
Shares of Ceylon Tobacco Company PLC fell 1.86
percent to 1.061.9 rupees a share in low volume.
Shares in Lanka IOC PLC, the Sri Lankan arm of
Indian Oil Corp, fell 3.23 percent, after the company
posted a 10.6 percent fall in net profit for the three months
ended March 31.
The market has been on a rising trend since mid-March as
many investors were compelled to return to the stock market
because low interest rates have made fixed-income assets less
attractive, stockbrokers said.
However, analysts have raised concerns over sluggish
economic growth due to lower credit growth and consumer
Despite a multi-year low interest rate regime, data showed
private sector credit grew 4.3 percent in March from a year
earlier, the slowest expansion since May 2010, while imports in
February fell 6.2 percent on the year.
On Monday, central bank Governor Ajith Nivard Cabraal said
Sri Lanka's private sector credit growth would pick up to around
15 percent by the end of this year and continue to improve
($1 = 130.3750 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil