Stock market hits near 3-wk high; banks lead

Reuters: Sri Lankan shares rose for a third straight session on Monday to close at a near three-week high as investors sought bargains in banking shares after the benchmark index fell to a near eight-month low last week.

The Colombo stock index gained 0.67% or 42.55 points to 6,368.12, its highest close since 15 November. The bourse gained 1.17% last week, recording its first weekly gain in four.

The banking index rose 1.35% with Commercial Care Plc leading the gains to end 9.87% higher. The island nation’s biggest listed lender, Commercial Bank of Ceylon Plc, rose 0.14%.

“We have seen the high net worth and institutional investors taking opportunity of the oversold market and are grabbing fundamentally sound shares,” said Yohan Samarakkody, head of research, SC Securities Ltd.

Foreign investors bought a net Rs. 13.5 million worth of shares on Monday, but they have been net sellers of Rs. 1.83 billion worth of shares so far this year.

Turnover stood at Rs. 1.02 billion ($ 6.89 million), well above this year’s daily average of Rs. 699.4 million.

The index had hit a near eight-month low on Tuesday on concerns that the proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth.

The government aims to boost its 2017 tax revenue by 27% to Rs.  1.82 trillion year-on-year and meet a commitment given to the International Monetary Fund in return for a $ 1.5 billion loan in May.

Brokers said investors were concerned about the sustainability of rates after the Central Bank on Tuesday kept key rates unchanged.

Shares of Asiri Hospitals rose 3.11% while conglomerate John Keells Holdings Plc rose 0.67%.