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Sri Lankan shares hit 5-wk closing low on rate hike fears
March 13, 2017 / 11:53 AM / 9 months ago

Sri Lankan shares hit 5-wk closing low on rate hike fears

COLOMBO, March 13 (Reuters) - Sri Lankan shares hit a five-week closing low on Monday on worries the country’s central bank would raise interest rates at a meeting next week after the International Monetary Fund urged it to tighten monetary policy, brokers said.

The Colombo stock index closed 0.23 percent down at 6,070.80, its lowest since Feb. 6. The index shed 0.27 percent last week, posting its third straight weekly decline.

The IMF last week urged Sri Lanka’s central bank to be ready to tighten monetary policy if credit growth or inflation does not abate.

The banking regulator is expected to unveil its second monetary policy of the year on March 24.

“The IMF statement on urging the central bank for a possible rate hike has weighed on sentiment,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Shares of conglomerate John Keells Holding Plc fell 1 percent, while biggest listed lender Commercial Bank of Ceylon Plc ended 1.09 percent weaker.

Foreign investors net bought shares worth 61 million rupees (about $403,041), a ninth straight session of purchases, extending the year-to-date net foreign inflow to 2.18 billion rupees worth of equities.

Turnover stood at 183.3 million rupees, the lowest since Feb.1 and well below this year’s daily average turnover of 679.6 million rupees.

Yields on treasury bills have risen to a more-than-four-year high since October despite the central bank keeping key policy rates steady. ($1 = 151.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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