Stocks slip as political uncertainty continues; banks weigh

Sri Lankan shares edged down in dull trade yesterday and settled near their lowest close in more than one week hit earlier in the week as continued political uncertainty dampened sentiment, stockbrokers said.

The market has been awaiting signs of political stability after President Maithripala Sirisena suspended parliament until May 8. A Cabinet reshuffle was expected on Monday, but government sources said it had been delayed.

Fitch Rating agency yesterday said that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

The Colombo stock index ended 0.18 percent weaker at 6,521.74. The index gained 0.88 percent last week.

“Market is down because of a fall in banking shares,” said Dimantha Mathew, head of research, First Capital Holdings.

“Most of the investors are still on the sideline due to the prevailing political uncertainty.”

Turnover stood at Rs.390.2 million (US$2.47 million), around a third of this year’s daily average of Rs.1.1 billion.

Foreign investors bought shares worth a net Rs.2.9 million yesterday, but they have been net sellers of Rs. 885.7 million worth of equities so far this year.

Shares of Lanka ORIX Leasing Company Plc fell 3.1 percent while Chevron Lubricants Lanka Plc ended 4.6 percent weaker.

Biggest listed lender Commercial Bank of Ceylon closed 0.1 percent down and Carson Cumberbatch Plc lost 2.8 percent.