December 5, 2016 / 11:50 AM / in a year

Sri Lanka shares hit near 3-wk high; banks lead

COLOMBO, Dec 5 (Reuters) - Sri Lankan shares rose for a third straight session on Monday to close at a near three-week high as investors sought bargains in banking shares after the benchmark index fell to a near eight-month low last week.

The Colombo stock index gained 0.67 percent or 42.55 points to 6,368.12, its highest close since Nov. 15. The bourse gained 1.17 percent last week, recording its first weekly gain in four.

The banking index rose 1.35 percent with Commercial Care Plc leading the gains to end 9.87 percent higher. The island nation’s biggest listed lender, Commercial Bank of Ceylon Plc, rose 0.14 percent.

“We have seen the high net worth and institutional investors taking opportunity of the oversold market and are grabbing fundamentally sound shares,” said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

Foreign investors bought a net 13.5 million rupees worth of shares on Monday, but they have been net sellers of 1.83 billion rupees worth of shares so far this year.

Turnover stood at 1.02 billion rupees ($6.89 million), well above this year’s daily average of 699.4 million rupees.

The index had hit a near eight-month low on Tuesday on concerns that the proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

Brokers said investors were concerned about the sustainability of rates after the central bank on Tuesday kept key rates unchanged.

Shares of Asiri Hospitals rose 3.11 percent while conglomerate John Keells Holdings Plc rose 0.67 percent. ($1 = 148.1000 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Vyas Mohan)

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