COLOMBO Aug 4 Sri Lankan stocks hit a near
three-year closing high on Monday, led by large cap shares, on
expectation of strong corporate earnings and interest rates
further falling, even as continued buying by foreign investors
propelled a shift into risky assets.
The main stock index ended 0.18 percent, or 12.02
points, firmer at 6,822.15, its highest close since September
20, 2011. It rose 6.82 percent in July and is up 15.21 percent
so far this year.
Hopes over strong corporate earnings, declining interest
rates and continued buying by foreign investors have helped
boost interest in risky assets in the $21.93 billion-worth stock
Turnover was 2.29 billion rupees ($17.59 million), more than
double this year's daily average of about 1.09 billion rupees.
Foreign investors were net buyers of 32.8 million rupees
worth of shares on Monday, extending the year to date net
foreign inflow to 10.93 billion rupees.
The index has been in the overbought region since July 3, as
local investors moved funds from fixed income to riskier assets
because of low interest rates and foreign buying.
Gains were led by large-cap share Ceylon Tobacco Company Plc
which rose 1.64 percent to 1,149.10 rupees. Top
conglomerate John Keells Holdings Plc rose 0.64 percent
to 237 rupees.
The Ceylon Tobacco Company reported a 11 percent fall in its
June quarterly earnings after market hours.
Trade Finance & Investments Plc which accounted
for 67.4 percent of the day's turnover rose 2.94 percent to 28
rupees. The company, in a disclosure, said five of its
shareholders sold 75.43 percent stake to Commercial Credit and
Finance Plc at 28 rupees a share.
Shares in Commercial Credit and Finance rose 1.6 percent to
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.
($1 = 130.2000 Sri Lankan Rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju