Bourse rebounds to 3-week high as blue chips gain

Reuters: Sri Lankan shares rose on Thursday to hit a near three-week closing high as heavyweights John Keells Holdings Plc and Commercial Bank of Ceylon Plc gained.

The Colombo stock index ended 0.4% higher at 6,694.64, its highest close since 26 May.

“We see encouraging signs with increased foreign participation,” said Hussain Gani, deputy CEO of Softlogic Stockbrokers. “The local investors are also returning to the market resulting in healthy turnover level.”

Foreign investors accounted for about 50% of the day’s turnover of Rs. 1.88 billion ($ 12.3 million), more than double this year’s daily average of Rs. 899.4 million.

Foreign investors, however, were net sellers of Rs. 55.6 million worth of shares, snapping nine straight sessions of net buying. But they have been net buyers of Rs. 20.68 billion worth of equities so far this year.

Sri Lanka’s economy grew 3.8% in the first quarter, slowing down from the previous quarter’s 5.3%, the state-run Census and Statistics Department said on Thursday after the markets closed.

Analysts said investors are still waiting to see the impact of the recent floods and landslides, caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

Inflation could rise in the short term, especially due to crop damage and difficulties in distributing fresh food produce and staple food items, analysts said.

Conglomerate John Keells rose 1.8%, while the country’s biggest listed lender, Commercial Bank of Ceylon Plc, and Sri Lanka Telecom Plc gained 2.7% and 2.9%, respectively.