July 10, 2018 / 11:52 AM / in 9 days

Sri Lankan shares end steady; turnover at near 3-month low

COLOMBO, July 10 (Reuters) - Sri Lankan shares closed steady on Tuesday, while the turnover slumped to a near three-month low as many investors remained on the sidelines due to a lack of bullish news amid concerns over political uncertainty, stockbrokers said.

Turnover stood at 142.7 million rupees ($896,357), its lowest since April 16, and less than a sixth of this year’s daily average of 909 million rupees.

The Colombo stock index ended flat at 6,077.37, hardly changed from Monday’s close.

“All this is due to the political uncertainty and no catalysts to move the market,” said Dimantha Mathew, head of research, First Capital Holdings.

“However, the good news is that lower turnover levels mean the sellers are not desperate to sell and the market is likely to recover soon.”

The index hit its lowest close since March 30, 2017, on Wednesday and has declined for a 19th session in 22 through Monday. It dropped 1.4 percent for the week, sliding for a seventh straight week.

Lower economic growth outlook has also hit sentiment after the central bank cut its estimate, analysts said.

Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy told reporters on Friday, adding that the earlier estimate was “ambitious”.

Foreign investor are selling and concerns about lower economic growth weighed on sentiment, analysts said.

They net bought equities worth 1.7 million rupees on Tuesday, but the bourse has seen an year-to-date foreign outflow of 2.25 billion rupees.

Gains led by Ceylon Tobacco Co, which closed 0.6 percent firmer, were offset by losses in Softlogic Holdings , which ended 3.4 percent lower.

Investors are waiting for some positive news both on the economic and political fronts, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.

The International Monetary Fund (IMF) said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.

$1 = 159.2000 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Sherry Jacob-Phillips

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