June 2, 2014 / 12:15 PM / 4 years ago

Sri Lankan stocks bounce back on foreign buying

COLOMBO, June 2 (Reuters) - Sri Lankan stocks bounced back on Monday from their lowest close in over three weeks hit in the previous session, on buying by foreign investors and expectation that interest rates would come down further, stockbrokers said.

The main stock index ended firmer 0.46 percent, or 28.95 points, at 6,292.41. It had closed at its lowest since May 7 on Friday.

“Foreign buying boosted the sentiment, while local funds were buying on the lower interest rate outlook,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

The bourse saw a net foreign inflow of 386.1 million rupees ($2.96 million) worth of shares, extending the year-to-date net foreign inflow to 2.64 billion rupees.

Analysts said the market expects further fall in interest rates after central bank governor Ajith Nivard Cabraal told Reuters on Friday that the central bank is creating room to cut interest rates further.

Cabraal signalled “a lot a space being created for some more dovish action”.

Monday’s turnover was 781.9 million rupees, lower than this year’s daily average of 1.01 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows in May for the fourth straight month, as expected.

Shares of conglomerate John Keells Holdings PLC rose 0.43 percent to 235 rupees, while Carson Cumberbatch surged 5.51 percent to 400 rupees.

E-Channelling PLC, which accounted for about 38.5 percent of the day’s turnover, gained 1.45 percent to 14 rupees.

The company said in a disclosure to the exchange that Senior Marketing Systems Asia PTE LTD, Singapore bought 21.4 million ordinary shares, or 17.5 percent of the voting ordinary shares in issue, and increased its shareholding in the firm to 47.4 percent. (here)

$1 = 130.4000 Sri Lankan Rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu

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