Bourse ends at highest in nearly 7 weeks but Rs. 907 m foreign outflow

Reuters: Stocks closed at a near seven-week high on Friday led by select shares in heavy trade as hopes of political stability after the 17 August Parliamentary polls lifted sentiment.

Foreign investors however cut holdings in blue chips, with net outflow of Rs. 906.9 million ($6.78 million) on Friday reversing year-to-date net inflow for the first time since 2 February.

Foreign investors have sold a net Rs. 762.9 million worth of shares so far this year, with outflows for the past 37 sessions alone reaching Rs. 6.7 billion.

Sri Lanka’s main stock index ended up 0.53%, or 37.82 points, at 7,161.96, its highest close since 1 June.

“Lot of buying interest was seen; especially after the president’s speech, some confidence level has been building up on the expectation of a stable government,” said Dimantha Mathew, a research manager at First Capital Equities Ltd.

President Maithripala Sirisena on Tuesday criticised a comeback bid by Mahinda Rajapaksa, the rival he beat in elections last January, and his own allies for backing him to become prime minister.

Analysts see Sirisena’s statement as a step towards strengthening his grip and one that is likely to help the ruling coalition win.

The day’s turnover stood at Rs. 1.95 billion ($14.57 million), the highest since 3 July and well above this year’s daily average of Rs. 1.06 billion.

Shares in mobile phone operator Dialog Axiata Plc rose 3.67%, while Lanka ORIX Leasing Company Plc rose 4.29%, pushing up the index.