COLOMBO, July 30 Sri Lankan stocks rose on
Wednesday to a near three-year closing high on expectation of
strong corporate earnings after market heavyweight John Keells
Holdings' upbeat results, while lower interest rates also helped
The main stock index ended 0.26 percent, or 17.57
points, higher at 6,801.84, its highest close since Sept. 20,
2011. It has gained 6.6 percent so far this month.
"Earning prospects are good and the market will continue to
run on earning hopes though some expect a correction," said a
stockbroker asking not to be named.
Lower interest rates have prompted local investors to buy
shares and move away from unattractive fixed assets, analysts
said. Yields on treasury bills edged down further by 7-10 basis
points at a weekly auction on Wednesday.
The International Monetary Fund urged Sri Lanka on Wednesday
to keep key interest rates on hold for the near term and said a
cautious approach is warranted.
The global lender said the central bank should be ready to
raise policy rates "with economic activity and private credit
growth on the rise, while there was also an opportunity for a
cut in the rates that might benefit the investment environment
and because of the current low inflation of below 5 percent.
Turnover was 973 million rupees ($7.47 million), less than
this year's daily average of about 1.09 billion rupees.
Foreign investors were net buyers of 151.2 million rupees
worth of shares, extending the year-to-date net foreign inflow
in shares to 10.85 billion rupees.
The index has been in the overbought region since July 3,
having risen 15.04 percent so far this year as local investors
moved funds from fixed income to riskier assets because of low
Shares of Ceylon Tobacco Company Plc, which mainly
moved up the index, jumped 4.48 percent to 1,150.40 rupees,
while Dialog Axiata Plc rose 0.93 percent to 10.90
Conglomerate John Keells Holdings Plc, which posted
a 35 percent growth in its June-quarter profit, fell 0.42
percent to 237 rupees. Analysts said investors sold the stock,
saying it was overheated.
($1 = 130.2000 Sri Lankan Rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by