Friday, 10 January 2014 00:00
-
- {{hitsCtrl.values.hits}}
REUTERS: Sri Lankan stocks rose for a third straight session to a near five-month high on Thursday with turnover boosted by foreign buying in risky assets, while analysts asked investors to focus on quality shares for double-digit returns.
The main stock index gained 0.25%, or 14.87 points, to end at 6,069.34, its highest close since 22 August. It has gained more than 2% in the last three sessions, with the index now in an over-bought region.
Analysts said the Central Bank’s interest rate cut last week and the recent fall in T-bill yields had boosted sentiment and helped sustain the gain. First Capital Equities advised investors in a note against seeking speculative positions and to focus on quality companies that would generate double-digit returns over a reasonable investment horizon.
“Investors are advised to refrain from applying a herd mentality in the current sideways market, but use the opportunity to review their portfolios in order to ensure that their allocations continue to reflect their risk appetite, investment goals and horizon,” it said.
The CSE index gained 4.8% in 2013 after losses in the previous two years, giving a return of 2.18% in dollar terms. Many investors locked their funds in risk-free debentures instead of risky assets due to a sluggish bourse and falling interest rates.
The day’s turnover was Rs. 1.57 billion, surpassing last year’s daily average of about Rs. 828.4 million. Foreign buying accounted for 56% of the turnover. Foreign investors bought a net Rs. 109 million ($ 833,000) worth of shares on Thursday, extending year-to-date foreign inflows to Rs. 169.8 million.
Offshore investors bought a net Rs. 22.88 billion worth of stocks last year, while 2011 saw a record Rs. 38.68 billion in net foreign inflows.
Ceylon Tobacco Co PLC shares rose 1.09% to Rs. 1,219.50, while Nestle Lanka PLC gained 1.91% to Rs. 2,166.80.
