COLOMBO Jan 2 Sri Lankan shares fell on the
first trading day of 2017 as investors sold market heavyweight
John Keells Holdings Plc and other blue chips amid
worries over a weakening rupee and rising interest
Conglomerate John Keells Holdings Plc fell 3.5 percent and
accounted for 67.6 percent of Monday's turnover of 329.2 million
rupees ($2.2 million).
The Colombo stock index closed down 0.6 percent at
6,192.87. The bourse fell 9.7 percent in 2016, its second
straight annual decline.
"Investors are selling Keells because a high net worth
investor sold large quantities. So investors sold the shares on
speculation that Keells will fall further," a stockbroker said,
asking not to be named.
"There has been some foreign selling in Keells in the last
month as well."
In dollar terms, Sri Lanka's stock market fell 13 percent in
2016, making it a worse performer than emerging Asian markets
like Malaysia, Thailand, Indonesia and
Stockbrokers said Sri Lanka's failure to attract foreign
direct investments and lack of investor confidence due to a
reversal in some budget policies weighed on the market and on
the rupee, which fell 3.9 percent in 2016 and remains weak.
The central bank on Friday kept its benchmark interest rates
steady for a fifth straight month as expected, saying credit
growth was responding to earlier tightening measures. Government
borrowing costs, however, are rising as the recent increase in
U.S interest rates raises the risk of capital outflows from
emerging markets such as Sri Lanka, adding pressure on the
Foreign investors sold a net 26.4 million rupees of equities
Shares in Trans Asia Hotel Plc dropped 12.1
percent while Sri Lanka Telecom Plc fell 2.8 percent
and shares in Commercial Bank of Ceylon Plc slipped
($1 = 149.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Susan