Friday, 18 April 2014 03:24
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Reuters: The share index rose to a near 2-1/2-month peak on Thursday and posted its biggest gain in almost seven weeks with high net worth investors buying banking shares on hopes of high profits due to an expected rise in private sector credit in the second half of the year.
The main stock index ended up 1.01% at 6,180.76, its highest close since 5 February and the biggest daily gain since 28 February.
“There was a lot of interest in banks,” a stockbroker said on condition of anonymity. “We expect the market to gain in the coming week as well after the holidays.”
Both currency and stock markets will be closed on Friday for Good Friday after they were shut on Monday and Tuesday for the Sinhala-Tamil New Year and a special bank holiday.
The day’s turnover was Rs. 664.1 million ($ 5.09 million), less than this year’s daily average of Rs. 976.1 million. Shares in banks and financials accounted for 62% of the day’s turnover, Bourse data showed.
With a lower interest rate regime, both the Central Bank and Finance Ministry have said private sector credit growth will rise in the second half of this year. Analysts expect rising credit demand to help boost banks’ profits.
The Bourse saw net foreign inflows for a seventh straight session. Offshore investors bought Rs. 3.3 million worth of stocks, though they have sold a net Rs. 8.04 billion of shares so far this year.
Top lender Commercial Bank of Ceylon and second largest lender Hatton National Bank ended 0.1% and 1.7% firmer respectively. Large cap Ceylon Tobacco Company PLC gained 3.8%.
Analysts said foreign investors could shift from the country’s risky assets if Sri Lanka does not cooperate in an international probe by the Office of the United Nations’ High Commissioner for Human Rights into the country’s alleged war crimes and human rights abuses.
The Foreign Minister said last week that the country would not cooperate with the inquiry.
