Bourse gains on hopes of political stability, earnings

Reuters: Sri Lankan shares ended at their highest in more than six months on Wednesday with strong turnover on hopes of political stability after the 17 August parliamentary elections and better earnings in the April-June quarter, brokers said.

The main stock index ended 0.77%, or 56.26 points up, at 7,366.31, its highest level since 29 January, Thomson Reuters data showed.

“June-quarter earnings have been good so far and investors expect better earnings to continue,” said Acuity Stockbrokers CEO Prashan Fernando. “We expect the index to be volatile with profit-taking here and there until 17 August election.”

The index had gained 6.4% in nearly a month through Wednesday as investors picked up risky assets on expectations of strong corporate earnings and political stability after the election in which political analysts see the current ruling party having an edge over the opposition coalition.

Turnover stood at Rs. 2.4 billion ($ 17.98 million), its highest since 29 July and more than double of this year’s daily average of Rs. 1.1 billion.

Gains were led by Commercial Credit and Finance Plc, which rose 8.03%. Top mobile phone operator Dialog Axiata Plc gained 0.92%.

Foreign investors, who sold a net Rs. 538.1 million in equities on Wednesday, have bought a net Rs. 162.91 million worth of shares so far this year.