Touch wood case and political uncertainty drive Sri Lanka shares down

While foreign investors continued with their selling of shares , Colombo stocks fell 0.68 percent on Tuesday due to negative investor sentiment amidst political uncertainity ahead of April General Elections, profit taking of investors, and intense selling of Touchwood shares, analysts said.

They said that Touch wood counter became active with the receiving of a letter by the Colombo Stock Exchange from the Sri Lanka's accounting watchdog, The Sri Lanka Accounting and Auditing Standards Monitoring Board, stating that they will seek leave to appeal from the Supreme Court against the company. 

The All Share Price Index closed at 3,809.01, down by 26.05 points or 0.68%, while the Milanka index of more liquid shares also dropped by 11.57 points or 0.26% to close at 4,382.32. Turnover was Rs.627 million and the share volume 19.9 million, according to stock exchange provisional figures. 

Touchwood Investments was the highest contributor to the total turnover with Rs. 55.2 million and its share closed at Rs. 11.50 drop by Rs.11.50. Eden hotels contributed Rs. 49.9 million with its share closing at Rs. 33.00 up by 50 cents. John Keels closed at Rs.167.00 down by Rs.1.00, contributing Rs.47.3 million to the turnover, a stock broker said. 

He said that foreign investors would watch out for factors like further erosion in fiscal management, rating downgrades, and political instability.