COLOMBO, July 18 Sri Lankan stocks ended flat on
Friday, hovering near a 33-month high struck on Wednesday as
profit-taking in diversified shares was offset by gains in
telecommunication shares, brokers said.
The island nation's share index has risen 5.39 percent so
far this month as the yields in risk free treasury bills and the
central bank's key monetary policy rates have fallen to
multi-year lows amid continued foreign buying.
The main stock index edged up 0.33 points, to
6,722.2, near its highest close since Oct. 3, 2011 hit on
"Investors are positive as the interest rates have come down
and the consumer demand is rising, which can have an impact on
the banking sector," said Dimantha Mathew, manager research at
First Capital Equities in Colombo.
The central bank on Monday kept policy rates steady at
multi-year lows for a sixth straight month, as expected, despite
private sector credit growth slowing to a 4-1/2-year low.
The index is in the overbought region since July 3. It has
risen 13.69 percent so far this year, Thomson Reuters data
Turnover was 1.3 billion rupees ($9.98 million), slightly
above this year's daily average of about 1.09 billion rupees.
Foreign investors were net buyers of 62.4 million rupees
worth of shares on Friday, extending net foreign inflows in
stocks to 10.02 billion rupees so far this year.
Shares in Sri Lanka Telecom Plc rose 0.91 percent
to 55.50 rupees, while large cap share Ceylon Tobacco Co Plc
rose 0.86 percent to 1,112 rupees.
Hemas Holdings, a diversified conglomerate, fell
1.64 percent to 48.1 rupees.
Lower interest rates have prompted local investors to buy
shares and shift their savings from unattractive fixed assets,
analysts said, as yields on treasury bills edged down further at
a weekly auction on Wednesday.
Analysts said foreigners have been buying risky assets
because they see value in them, while falling yields in fixed
assets gradually prompt local investors to shift to equities.
The market has been on a rising trend since late February
due to continued foreign buying and lower interest rates.
($1 = 130.2000 Sri Lankan Rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand