COLOMBO May 20 Sri Lanka stocks ended steady on
Tuesday, hovering above their highest close in more than 11
months after the central bank kept key rates at multi-year lows.
The gains were led by telecom stocks and stockbrokers expect
further gains due to lower interest rates.
The main stock index ended up 0.04 percent, or 2.37
points, to 6,321.61, its highest close since June 10 last year.
Before the market opened, the central bank kept policy rates
steady for the fourth straight month, as expected.
The exchange witnessed net foreign outflow for the first
time in 20 sessions. Offshore investors were net sellers of 17.3
million rupees ($132,700) worth of shares on Tuesday, but they
have been net buyers of 842.56 million so far this year.
Shares of top mobile phone operator Dialog Axiata
ended up 1.03 percent at 9.80 rupees.
The market has been on a rising trend since mid-March as
many investors were compelled to return to the stock market
because low interest rates have made fixed-income assets less
attractive, stockbrokers said.
The index has risen 1.53 percent in the last eight sessions.
However, analysts have raised concerns over sluggish
economic growth because of lower credit growth and consumer
Despite a multi-year low interest rate regime, data showed
private sector credit grew 4.3 percent in March from a year
earlier, the slowest expansion since May 2010, while imports in
February fell 6.2 percent on the year.
On Monday, central bank Governor Ajith Nivard Cabraal said
Sri Lanka's private sector credit growth would pick up to around
15 percent by the end of this year and continue to improve
On Tuesday, the central bank said it expected to introduce a
new guarantee scheme for gold loans to boost credit growth.
($1 = 130.3500 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil