April 26, 2018 / 12:17 PM / 5 months ago

Sri Lankan stocks slip as political uncertainty continues; banks weigh

COLOMBO, April 26 (Reuters) - Sri Lankan shares edged down in dull trade on Thursday and settled near their lowest close in more than one week hit earlier in the week as continued political uncertainty dampened sentiment, stockbrokers said.

The market has been awaiting signs of political stability after President Maithripala Sirisena suspended parliament until May 8. A cabinet reshuffle was expected on Monday, but government sources said it had been delayed.

Fitch Rating agency on Thursday said that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

The Colombo stock index ended 0.18 percent weaker at 6,521.74. The index gained 0.88 percent last week.

“Market is down because of a fall in banking shares,” said Dimantha Mathew, head of research, First Capital Holdings.

“Most of the investors are still on the sideline due to the prevailing political uncertainty.”

Turnover stood at 390.2 million rupees ($2.47 million), around a third of this year’s daily average of 1.1 billion rupees.

Foreign investors bought shares worth a net 2.9 million rupees on Thursday, but they have been net sellers of 885.7 million rupees worth of equities so far this year.

Shares of Lanka ORIX Leasing Company Plc fell 3.1 percent while Chevron Lubricants Lanka Plc ended 4.6 percent weaker.

Biggest listed lender Commercial Bank of Ceylon closed 0.1 percent down and Carson Cumberbatch Plc lost 2.8 percent. ($1 = 157.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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