Saturday, 4 October 2014 01:19
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Reuters: Stocks hit 40-month highs on Friday, with turnover hitting a three-week high, led by a rally in banks and foreign buying in Dialog Axiata.
Gains were also supported by buying from local investors, who invested in risky assets because of lower interest rates.
The main stock index ended up 0.76%, or 55.55 points, at 7,406.60, its highest close since 31 May 2011.
“The market is bullish and we saw strong buying across the board. There was strong foreign and institutional interest. They are moving up and buying the quantities,” said research manager at First Capital Equities Ltd. Dimantha Mathew.
Foreign investors bought a net Rs. 2.26 billion of shares on Friday, extending net foreign inflows to Rs. 9.7 billion so far this year.
Dialog Axiata Plc, which saw a net 137.6 million shares of foreign buying, rose 3.31% to Rs. 12.50.
Analysts said local investors have no alternative but to buy stocks. Though the Central Bank has kept interest rates unchanged since January, yield in the one-year t-bill has fallen around 260 basis points so far this year.
The day’s turnover was at Rs. 4.39 billion ($ 33.69 million), highest since 11 September and more than three times this year’s daily average of over Rs. 1.35 billion.
The biggest listed lender by the market capitalisation, Commercial Bank of Ceylon Plc, which led the market gain, rose 3.44% to Rs. 165.50 while DFCC Bank Plc gained 7.48% to Rs. 231.40.
