COLOMBO May 22 Sri Lanka stocks ended steady on
Thursday with foreign investors buying into the island nation's
risky assets after sentiment was boosted by the central bank's
decision to hold policy rates at multi-year lows.
The main stock index ended up 0.01 percent, or 0.85
points, at 6,290.17, after having dipped slightly during early
Stockbrokers expect gains due to lower interest rates after
the central bank kept key rates at multi-year lows on Tuesday
for the fourth straight month, as expected.
The exchange witnessed a net foreign inflow of 150.2 million
rupees ($1.15 million) on Thursday, extending year-to-date net
foreign inflow to 1.49 billion rupees.
The day's turnover stood at 611.5 million rupees, less than
this year's daily average of 1.03 billion.
Shares of leading fixed-line telephone operator Sri Lanka
Telecom Plc rose 1.91 percent to 47.90 rupees.
Shares in Commercial Leasing and Finance PLC rose
2.63 percent to 3.90 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.
However, analysts have raised concerns over sluggish
economic growth due to 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 Wednesday, the chief executive of the exchange, Rajeeva
Bandaranaike, told Reuters that the bourse is struggling with
lack of liquidity, and is trying to increase the free float of
the shares it lists to attract foreign funds.
($1 = 130.3650 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil