Sri Lanka's main stock index fell on Monday after climbing to a near four-year high as investors took profits amid uncertainty around new President Maithripala Sirisena's economic policies. The main stock index rose 0.9 percent to 7,670.98, its highest since March 2011, before reversing the climb and closing down 0.51 percent, or 39.09 points, at 7,566.70. The index hit its highest close since March 2011 on Friday.
There was some profit-taking and investors were waiting for direction due to the political uncertainty, said Dimantha Mathew, manager research, at First Capital Equities (Pvt) Ltd. Construction firm Access Engineering fell 9.6 percent. Dealers said there was speculation it may not get lucrative contracts under the new government.
Former President Mahinda Rajapaksa lost his bid for a third term on Friday, ending a decade of rule that critics say had become increasingly authoritarian and marred by nepotism and corruption. After the election, leader of the pro-business opposition United National Party, Ranil Wickremesinghe, was appointed Prime Minister, though Rajapaksa's coalition still has a majority in parliament. Many of its lawmakers have pledged to back Sirisena.
Sirisena's coalition has promised a 100-day programme to restore democracy and the economy before he dissolves the parliament for a general election after April 23. Analysts said the political uncertainty over Sirisena's coalition could weigh on the markets until he wins a majority in the 225-member parliament. The day's turnover was 2.57 billion rupees ($19.6 million), well over last year's daily average of 1.42 billion rupees, stock exchange data showed. Foreign investors were net buyers of 230.5 million rupees worth of shares on Monday. They bought a net 22.07 billion rupees worth of stocks last year.
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