Shares post near four-month closing high; telcos lead

Saturday, 7 May 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares rose for a second straight session on Friday to hit their highest close in about four months, led by telecom stocks amid foreign investors’ buying.

However, the gains were capped as investors were worried that the island government’s move to increase the value added tax (VAT) and impose new taxes effective from Monday would hit the bottom lines of companies.

The benchmark stock index rose 0.21% to 6,592.45, its highest closing level since 11 January. For the week, it gained 1.2%, its fifth straight weekly rise.

“It looks like the market is continuing to move up at a slow pace with some foreign selling pressure on big-cap shares,” said First Capital Equities Ltd Head of Research Dimantha Mathew.

“High interest rates and earnings yet to be released will have an impact on the market.”

Foreign investors, who have sold equities worth Rs 2.88 billion ($19.84 million) so far this year, were net buyers for the second straight session on Friday. They bought a net Rs. 71.7 million worth of shares.

Turnover stood at Rs. 701.2 million, less than this year’s daily average of around Rs. 777 million.

Leading fixed line phone operator Sri Lanka Telecom Plc jumpead 6.03%, while conglomerate John Keells Holdings Plc rose 0.58%.