Bourse at 3-week high on Budget hopes

Reuters: Stocks edged up to a three-week high on Friday, a day after President Mahinda Rajapaksa announced plans to boost the capital market by encouraging new listings of shares and debentures through tax exemptions, brokers said.

Under the Budget, presented on Thursday, the Government also aims to reduce the fiscal deficit to 5.8% of gross domestic product (GDP) in 2013, while attaining 7.5% economic growth next year.

The Colombo Stock Exchange’s main index rose 0.15%, or 8.59 points, to end at 5,589.43, its highest level since 19 October.

“The 2013 Budget... contains several proposals that would facilitate long-term growth across most of the sectors of the economy with higher weightage given to capital market development,” SC Securities said in a note to investors. “The proposals brought forward to develop the debt and equity market will have considerable positives in the medium to long term we believe.”

Turnover was Rs. 986 million ($ 7.55 million), more than this year’s daily average of Rs. 909.4 million. Foreigners bought a net Rs. 112.4 million worth of shares, extending the net foreign inflow this year to Rs. 35 billion.

The rupee closed flat at 130.75/85 in dull trade, dealers said.