Sri Lanka shares decline as floods fan economic fallout fears

Sri Lankan shares logged their worst session since early April on Monday, hurt by mounting fears that devastating floods triggered by Cyclone Ditwah will hit the island nation’s economy.

The benchmark CSE All Share index tumbled 3.04% to 22,022.06.

All sub-sectors fell on the day, with consumer discretionary and real estate stocks leading losses with 4.6% and 4.4% declines respectively.

Kandy Hotels Company (1938) and Ceylon Hotels Corporation were the top two percentage losers on the CSE All Share, retreating 13.7% and 12% respectively.

At least 355 people have died so far after Cyclone Ditwah hit Sri Lanka last week and set off landslides and floods, triggering a natural disaster that President Anura Kumara Dissanayake called the “largest and most challenging” in Sri Lanka’s history.

The selloff in the stock market stems from investor concerns from the impact of the floods on the economy, said Shehan Cooray, head of research at HNB Stockbrokers.

“We expect further market moves to be guided by more information as they come in,” said Raynal Wickremeratne, co-head of research at Softlogic Stockbrokers.

Trading volume on the CSE All Share nearly quadrupled to 236.4 million shares compared with the previous session.

The equity market’s turnover surged to 5.24 billion Sri Lankan rupees ($17 million) from 1.94 billion rupees in the previous session, according to exchange data.

Foreign investors were net sellers, offloading stocks worth 143.2 million rupees, while domestic investors were net buyers, purchasing shares worth 5.2 billion rupees, the data showed.