Stocks close at more than 11-month high on foreign buying
Saturday, 17 May 2014 00:31
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Reuters: Stocks closed at their highest in more than 11 months on Friday, led by foreign buying in the market heavyweight, John Keells Holdings PLC, and large caps on positive market sentiment buoyed by lower interest rates.
The main stock index rose 0.48%, or 30.23 points, to 6,315.19, its highest close since 10 June last year.
The exchange enjoyed a net foreign inflow of Rs. 943.8 million on Friday, reversing the year-to-date net foreign outflow to an inflow of 681.5 million.
Top conglomerate John Keells Holdings PLC rose 0.2% to Rs. 235, while shares in Commercial Bank of Ceylon PLC, rose 0.5% to Rs. 129.60. Large cap share Ceylon Tobacco Company PLC rose 1.65% to Rs. 1,089.50.
Foreign investors bought a net 3.1 million shares in Keells, which accounted for about 53% of the day’s turnover of Rs. 1.61 billion, exceeding this year’s daily average of 1.04 billion.
Positive global investor sentiment on the Indian market, where the Hindu nationalist party of Narendra Modi is leading in vote counting after national polls, could boost sentiment in Sri Lanka, some brokers said.
“Sri Lanka also could get some foreign attraction due to Indian elections,” said a stockbroker who asked not to be named. “Investors will look at the region because of India and they may invest in Sri Lanka also.”
However, analysts said a landslide election victory for Modi would not have a direct impact on Sri Lanka’s stocks, but a new government’s approach to the Colombo Government’s post-war issues will have an indirect impact on investor sentiment.
Analysts still see concerns over sluggish economic growth because of lower credit growth and consumer spending.
Stockbrokers said many investors had been compelled to return to the stock market due to interest rates at multi-year lows that have made fixed income assets less attractive.
It rose 1.43% in the last six sessions, while it enjoyed a Rs. 8.09 billion ($ 62.08 million) inflow in the last eight sessions.
Despite a multi-year low interest rate regime, data showed private sector credit grew 4.4% in February from a year earlier, the slowest expansion since May 2010, while imports in February fell 6.2% on the year.
