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Sri Lanka stocks close at 2-1/2-month high; banks in focus
April 17, 2014 / 12:15 PM / 4 years ago

Sri Lanka stocks close at 2-1/2-month high; banks in focus

COLOMBO, April 17 (Reuters) - The Sri Lankan share index rose to a near 2-1/2-month peak on Thursday and posted its biggest gain in almost seven weeks with high networth investors buying banking shares on hopes of high profits due to an expected rise in private sector credit in the second half of the year.

The main stock index ended up 1.01 percent at 6,180.76, its highest close since Feb. 5 and the biggest daily gain since Feb. 28.

“There was a lot of interest in banks,” a stockbroker said on condition of anonymity. “We expect the market to gain in the coming week as well after the holidays.”

Both currency and stock markets will be closed on Friday for Good Friday after they were shut on Monday and Tuesday for the Sinhala-Tamil new year and a special bank holiday.

The day’s turnover was 664.1 million rupees ($5.09 million), less than this year’s daily average of 976.1 million rupees. Shares in banks and financials accounted for 62 percent of the day’s turnover, bourse data showed.

With a lower interest rate regime, both Sri Lanka’s central bank and finance ministry have said private sector credit growth will rise in the second half of this year. Analysts expect rising credit demand to help boost banks’ profits.

The bourse saw net foreign inflows for a seventh straight session. Offshore investors bought 3.3 million rupees worth of stocks, though they have sold a net 8.04 billion rupees of shares so far this year.

Top lender Commercial Bank of Ceylon and second largest lender Hatton National Bank ended 0.1 percent and 1.7 percent firmer respectively. Large cap Ceylon Tobacco Company PLC gained 3.8 percent.

Analysts said foreign investors could shift from the island nation’s risky assets if Sri Lanka does not cooperate in an international probe by the Office of the United Nations’ High Commissioner for Human Rights into the country’s alleged war crimes and human rights abuses.

Sri Lanka’s foreign minister said last week that the country would not cooperate with the inquiry. ($1 = 130.5750 Sri Lanka Rupees)

Reporting by Shihar Aneez; Editing by Anupama Dwivedi

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