Shares gain for 6th session; Keells leads

Reuters: Shares rose for a sixth straight session on Wednesday to a more than two-week high despite foreign outflows, led by market heavyweight John Keells Holdings Plc.

Foreign investors were net sellers of Rs. 226.4 million ($1.61 million) worth of shares on Wednesday, extending the year-to-date net foreign out flow to Rs. 3.12 billion.

The main stock index ended 0.15% or 10.61 points up at 7,094.09, its highest close since 12 October.

The day’s turnover was Rs. 1.14 billion ($8.09 million), just above this year’s daily average of Rs. 1.1 billion.

“People are taking some positions and it looks like the interest is coming back to the market,” said a stockbroker asking not to be named.

“Retailers have not been active. They are awaiting proper direction and positive sentiment. But the market is looking good and interest level will continue to grow.”

Danushka Samarasinghe, Head of Research Softlogic Stockbrokers, said a $1.5 billion 10-year sovereign bond sale on Tuesday was seen as a positive.

Sri Lanka paid less than it had expected to borrow $1.5 billion via a 10-year sovereign bond on Tuesday, with strong orders helping bring down the yield on the issue to 6.85% from an initial guidance of around 7%.

However, the borrowing cost for Sri Lanka’s largest eurobond issue was expensive compared with the previous 10-year papers.

Prime Minister Ranil Wickremesinghe is expected to announce the country’s economic policy in the first week of November, outlining the Government’s economic priorities ahead of the 2016 Budget scheduled for 20 November.

Analysts said a Government move to implement a Budget proposal for a retrospective tax targeting corporates had dented sentiment. Shares of conglomerate John Keells Holdings rose 1.52%.