Sri Lanka stocks fell 0.64 percent for the second session on Thursday (16) due to profit taking ahead of next week’s Christmas holidays while foreign investors exit from the bourse amid concerns over sharp currency depreciation, brokers said.
“The market slipped due to profit taking today and this is a norm during the second half of December ahead of the holidays. Also the market had record gains in the past weeks so this is a much needed breather for the market,” a Colombo-based analyst said.
Foreign investors sold a net of 298 million rupees’ worth of shares on Thursday, a move brokers attributed to concerns over possible depreciation of the rupee currency as the exchange rate has been fixed by teh central bank. The bourse has suffered a net foreign outflow of 50 billion rupees so far this year.
All Share Price Index fell 75.81 points to close at 11,678.65. The more liquid S&P SL 20 index, which was trending upwards throughout the last four sessions, fell 0.49 percent or 20.73 points down to close at 4,212.29. With an increased interest on the dollar income companies due depreciation risk, investors were coming into the market during the last four sessions. Investor concerns over rupee depreciation come after depletion of the foreign reserve faced by the country, Analysts earlier this week said market players are worried about the rupee currency which is fixed by the central bank against US dollar shortage of foreign currency threatening a sharp depreciation. With the Central bank’s official data last week showing that foreign reserves have depleted to their lowest in more than a decade, analysts said, investors who hold shares of the companies which only deal with rupee currency are concerned over possible depreciation. With import bans also being lifted investors were moving into construction and material sector shares such as ceramic companies, brokers said. Brokers have also cited a market correction is due soon with high liquidity is driving the market and some shares have been pumped with no fundamental reasons. The day’s turnover was 8.3 billion rupees, above this year’s average daily turnover of 4 billion rupees. The fall was mainly led by Expolanka, LOLC Holdings, and Commercial Leasing and Finance. Expolanka, the market heavyweight which has a significant component of export and freight business, fell 1.13 percent to close at 371.50 rupees a share..
LOLC Holdings fell 1.33 percent to close at 1,115.50 rupees a share and Commercial Leasing and Finance closed 3.33 percent down to 29.00 rupees a share.