The Colombo Stock Exchange extended its post-rate-hike slide on Thursday, with the benchmark All Share Price Index closing down 1.14 percent, or 250.79 points, at 21,760 as investors continued to rotate out of equities into fixed-income assets, brokers said.
The more liquid S&P SL20 closed down 1.08 percent, or 66.10 points, at 6,031. Market turnover was Rs. 2.78 billion.
“After the rate hike, there is a low level of interest in the market,” Dimantha Mathew, Chief Research and Strategy Officer at First Capital Holdings PLC, told EconomyNext. He said funds were flowing into fixed income, with commercial paper now offering 15 percent. “Even though most earnings posted showed good results, there was no great reaction among investors. There’s less buying interest. Fund managers are selling down some stakes.”
The index has continued to close down this week, after the Central Bank of Sri Lanka hiked its policy rate by 100 basis points at last week’s monetary policy review. Treasury bill and bond yields have since spiked, and some banks — notably Commercial Bank — have raised term deposit rates.
Top negative contributors to the ASPI on Thursday were Dialog (down Rs. 1.90 at Rs. 40.90), Commercial Bank (down Rs. 2.75 at Rs. 202.25), Melstacorp (down Rs. 2.75 at Rs. 182.25), Hatton National Bank (down Rs. 4.50 at Rs. 390.50) and Cargills (down Rs. 16.50 at Rs. 668.25).
The rupee closed weaker in the spot market at 336.90/337.50 to the US dollar, from 334.50/335.50 the previous day, dealers told EconomyNext. The telegraphic transfer rate was quoted at 330.50 buying and 339.50 selling. The currency had closed at Rs. 334.50/335.50 on Wednesday and at Rs. 332.20/333.00 earlier in the week.
Government bond yields closed mostly up. A bond maturing on 1 August 2030 closed at 12.25/40 percent, up from 12.15/25 percent; a bond maturing on 15 January 2033 closed flat at 12.30/75 percent; and a bond maturing on 15 March 2035 closed at 13.20/30 percent, up from 13.15/25 percent.
In corporate news, Mercantile Investment and Finance said it had listed 33.4 million ordinary voting shares after a rights issue raising Rs. 1.1 billion. United Motors Lanka announced a dividend of 40 cents a share, subject to shareholder approval.
