November 9, 2012 / 11:30 AM / 5 years ago

Sri Lankan stocks at 3-week high on budget hopes

COLOMBO, Nov 9 (Reuters) - Sri Lankan stocks edged up to a three-week high on Friday, a day after President Mahinda Rajapaksa announced plans to boost the capital market by encouraging new listings of shares and debentures through tax exemptions, brokers said.

Under the budget, presented on Thursday, the government also aims to reduce the fiscal deficit to 5.8 percent of gross domestic product (GDP) in 2013, while attaining 7.5 percent economic growth next year.

The Colombo Stock Exchange’s main index rose 0.15 percent, or 8.59 points, to end at 5,589.43, its highest level since Oct.19.

“The 2013 budget ... contains several proposals that would facilitate long-term growth across most of the sectors of the economy with higher weightage given to capital market development,” SC Securities said in a note to investors.

“The proposals brought forward to develop the debt and equity market will have considerable positives in the medium to long term we believe.”

Turnover was 986 million Sri Lanka rupees ($7.55 million), more than this year’s daily average of 909.4 million rupees. Foreigners bought a net 112.4 million rupees worth of shares, extending the net foreign inflow this year to 35 billion.

The rupee closed flat at 130.75/85 in dull trade, dealers said. ($1 = 130.6500 rupees) (Reporting by Ranga Sirilal and Shihar Aneez)

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