Sunday, 26 May 2024
Sri Lanka shares end near 2-week low ahead of cenbank policy

Sri Lanka shares end near 2-week low ahead of cenbank policy

Sri Lankan shares fell to a near two-week low on Monday as cautious investors waited for cues from the central bank's decision on interest rates and talks on a loan deal with the International Monetary Fund.

The central bank's April monetary policy announcement is scheduled for 1130 GMT on Tuesday, and expectations are that it would keep key interest rates steady, a Reuters poll showed.

However, a surprise hike is not ruled out as five out of 11 analysts expect the central bank to raise the policy rate to keep government borrowing in check through tighter financing conditions.

The central bank has twice tightened rates since December to ease the pressure on a fragile rupee.

The benchmark stock index ended 0.67 percent or 43.12 points weaker at 6,379.53, its lowest close since April 12.

"The selling pressure was there and we expect it to continue over the week due to the high interest rates and also the poor economic conditions," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

A visiting IMF mission said it expected to complete negotiations with Sri Lanka for a three-year loan programme in the next two weeks.

Foreign investors were net buyers of 102.2 million rupees ($702,646.96) worth of equities on Monday, but have been net sellers of 3.04 billion rupees so far this year.

Turnover stood at 437.1 million rupees, less than this year's daily average of around 776.3 million rupees.

Shares in John Keells Holdings Plc fell 2 percent, while those in Commercial Bank of Ceylon Plc dropped 1.50 percent.

($1 = 145.4500 Sri Lankan rupees)


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