Shares recover from over 4-month low on foreign buying

Reuters: Shares on Thursday edged up from their lowest close in more than four months hit in the previous session, as foreign investors bought battered shares.

The Colombo stock index ended 0.02% higher at 6,362.18, recovering from its lowest close since 17 April hit on Wednesday.

The Bourse ended 0.3% lower last week, its seventh straight weekly fall. As of Wednesday’s close, it shed more than 4.6% since 27 July.

Shares of Lanka ORIX Leasing Company Plc ended 6.7 percent higher, while Ceylon Cold Stores Plc closed up 1.0% and Melstacorp Ltd ended 0.9% firmer.

Foreign investors net bought Rs. 332.1 million ($ 2.18 million) worth of shares, extending the year-to-date net foreign inflow to Rs. 27.7 billion worth equities.

“Market is up with some foreign buying,” said Dimantha Mathew, head of research, First Capital Holdings.

“The market is slow as investors are waiting to see the direction.”

Mathew said investors are waiting to see the clarity on taxes following the Inland Revenue Bill and also waiting to see the outcome of the US Fed rate announcement.

The bill, Sri Lanka’s major tax reform since independence from Britain in 1948, seeks to expand the tax net and stamp out evasion. It is expected to be presented in the parliament on 7 September.

Turnover stood at Rs. 627.6 million, less than this year’s daily average of around Rs. 860.9 million.