Stock market ends firmer on foreign buying

Saturday, 13 August 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares edged up on Friday hovering near its more-than-10-week high, hit earlier in the week, as heavy buying by foreign investors in index heavyweight John Keells Holdings Plc boosted sentiment.

The benchmark Colombo stock index ended up 0.11%, or 7.37 points, at 6,522.14.

Investors hoped that the economic fundamentals would improve after the central bank on 28 July raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth.

“Foreign buying in John Keells buoyed sentiment. We see interest from retail investors as well, though one foreign fund has been exiting during the past few days,” said First Capital Equities CEO Jaliya Wijeratne.

Foreign investors net bought Rs. 154.7 million($1.06 million) worth of shares, including a net 858,741 shares in John Keells on Friday, extending the net foreign inflow to Rs. 1.49 billion worth of equities in the last 13 sessions.

However, they have sold Rs. 3.32 billion worth of shares so far this year.

Turnover stood at Rs. 725 million, on track with this year’s daily average of around Rs. 731.7 million.

Shares in John Keells Holdings Plc gained 0.07% while CT Holdings Plc climbed 3.7% and Hatton National Bank Plc rose 0.9%.

Analysts said investors also shrugged off a Supreme Court order asking the parliament to stop considering a bill to raise the value-added tax as the draft had not followed due process.

The move could put in jeopardy the government’s ambitious fiscal consolidation plan to reduce the budget deficit to 5.4% of gross domestic product from last year’s 7.4%.