December 19, 2017 / 11:51 AM / a year ago

Sri Lankan stocks hit over 8-mth closing low; lenders fall

COLOMBO, Dec 19 (Reuters) - Sri Lankan shares fell for a third straight session on Tuesday to their lowest close in more than eight months as investors offloaded banking and diversified stocks.

The Colombo Stock Index ended 0.33 percent weaker at 6,325.46, its lowest close since April 11. The index was down 0.4 percent last week, its sixth consecutive weekly decline.

“Today we are seeing some selling in Sampath Bank after it announced a second rights issue for the year on top of the debenture issue,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“With holidays ahead, we think this dull period will continue.”

Samapath Bank Plc, in a filing to the Colombo stock exchange, said it will issue 50.1 million new shares. The bank will issue three shares for every thirteen existing shares held, to increase its tier 1 capital to comply with Basel III requirements.

The bank added it would also issue 50 million five-year debentures at an issue price of 100 rupees apiece.

Sampath Bank Plc fell 4.9 percent while conglomerate John Keells Holdings Plc ended 0.7 percent lower and biggest listed lender Commercial Bank of Ceylon Plc lost 1.2 percent.

Turnover was 357.6 million rupees ($2.34 million), well below this year’s daily average of 933.4 million rupees.

Foreign investors were net buyers of 26.7 million rupees worth of shares on Tuesday, extending their year-to-date net equity purchases to 18.4 billion rupees.

Plantation stocks came under pressure after the Russian agricultural safety watchdog said on Thursday that the country will place temporary restrictions on imports of all agricultural products from Sri Lanka, including tea, from Dec. 18.

Analysts said the Russian restrictions on tea could pose a threat to long-term tea prices and it could impact the earnings of plantation companies. ($1 = 153.0500 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Vyas Mohan)

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