Bourse climbs for third session as Janashakthi Insurance jumps

Reuters - Shares rose for a third straight session on Friday to their highest close in more than three weeks, boosted by a surge in Janashakthi Insurance PLC as it agreed to sell its general insurance unit to Germany’s Allianz SE.

Janashakthi stock jumped about 28% in the session, bringing its weekly gain to a whopping 73%.

The insurer said on Friday it agreed to sell its wholly owned subsidiary Janashakthi General Insurance Ltd for Rs. 16.4 billion ($106.4 million) to Allianz.

The Colombo Stock Index ended up 0.34% at 6,520.46, its highest close since 9 January. The market rose 1% this week, its second straight weekly gain.

“A combination of retail, high-net-worth and foreign investors were active today,” First Capital Holdings Head of Research Dimantha Mathew said.

Cargills (Ceylon) PLC rose 5.7%, while Nestle Lanka PLC ended 2.4% up, and Ceylon Tobacco Company PLC rose 0.9%.

The market turnover was Rs. 1.22 billion ($7.9 million), more than last year’s daily average of Rs. 915.3 million.

Foreign investors sold a net Rs. 3.8 million worth of shares on Friday, but they have been net-buyers of Rs. 4.2 billion worth of equities so far this year.

Analysts said the political uncertainty ahead of the long delayed local government election next month continued to weigh on sentiment. 

President Maithripala Sirisena in an election rally over the weekend said he was ready to form a new government with his Sri Lanka Freedom Party (SLFP), breaking away from the current coalition - a comment that exacerbated worries about the future of the coalition Government.

Sri Lanka’s stock, bond and foreign exchange markets are closed on Monday for a special holiday. Markets will resume trading on Tuesday.