Bourse at 1-1/2-year high on blue chips, retail buying

Wednesday, 8 May 2013 03:56 - - {{hitsCtrl.values.hits}}

Reuters: Shares closed at their highest in nearly 1-1/2 years on Tuesday, led by blue chips, due to an improved appetite for risky assets after heavy foreign buying amid hopes of a rate cut at the Central Bank’s policy meeting later this week.

The main stock index rose 1.32%, or 80.51 points, to 6,201.68, the highest close since 14 November 2011.

“Investors are upbeat after foreign investors have been buying continuously. Retail investors are also on the buying side as they hope for a rate cut on Friday,” a stockbroker said on condition of anonymity.

Shares have been on a rising trend on expectations of a fall in interest rates after Treasury Secretary Dr. P.B. Jayasundera and the Central Bank said interest rates could ease in May-June.

The market has gained 7.3% since the Treasury Secretary’s comments on 9 April.

The International Monetary Fund, however, said on Thursday Sri Lanka must not loosen monetary conditions as inflation remains a concern, even though prices had risen at a slower pace in April than the previous month.

Shares in market heavyweight John Keells Holdings rose 1.65% to Rs. 264.50 a share.

The turnover was Rs. 1.39 billion ($ 11 million), more than this year’s daily average of Rs. 1 billion.

Foreign investors were net buyers of Rs. 248.8 million of shares, extending the net foreign inflow so far this year to Rs. 9.21 billion. Last year, the Bourse saw a net inflow of $ 303 million.

The rupee ended at 126.30/37 per dollar, firmer from Monday’s close of 126.40/50, on exporter dollar sales, said currency dealers.