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Sri Lanka stocks gain to near 8-week high on Keells
April 8, 2014 / 11:51 AM / 4 years ago

Sri Lanka stocks gain to near 8-week high on Keells

COLOMBO, April 8 (Reuters) - The Sri Lankan share index rose to a near eight-week high on Tuesday, led by top conglomerate John Keells Holdings Plc amid foreign buying in the island nation’s risky assets.

The main stock index ended 0.39 percent, or 23.78 points, firmer at 6,072.16, its highest close since Feb. 13.

“Lower interest rate is driving the market,” a stockbroker said on condition of anonymity.

The stock market is gradually attracting investors who are looking for higher returns as the deposit rates in banks and financial companies are not beyond 6-6.5 percent, the broker said.

Analysts, however, said foreign investor sentiment is yet to recover after the United Nations on March 27 announced it would probe alleged war crimes by the island nation.

The bourse has suffered 5.16 billion rupees in foreign outflows in the eight sessions since March 28 due to the exit of a large foreign fund.

The day’s turnover was 645.1 million rupees ($4.93 million) turnover, well below this year’s daily average of 995.6 million rupees.

The bourse saw net foreign inflows of 93.6 million rupees, though foreigners have net sold 9.29 billion rupees worth of shares so far this year.

Shares in John Keells Holdings rose 1.88 percent to 238.80 rupees a share while Commercial Leasing and Finance PLC gained 5.26 percent to 4.00 rupees.

The United Nations has launched an inquiry into war crimes allegedly committed by both Sri Lankan state forces and Tamil rebels during a conflict that ended in 2009, saying the government had failed to investigate properly.

Analysts said the outcome of the resolution was expected, but investors’ sentiment has been dented over concerns it could hurt the country’s economy.

Several potential buyers of risky assets are waiting for a clear direction. ($1 = 130.7300 Sri Lanka Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

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