Sri Lanka shares edge up, but post 1st weekly loss in 3 weeks

COLOMBO, April 1 (Reuters) – Sri Lankan shares rose for a third straight session to hit a one-week high on Friday led by large caps amid high turnover, but posted their first weekly decline in three as rising interest rates and economic woes dented sentiment, dealers said.

Turnover hit a three-week high of 2.01 billion rupees ($13.81 million) on block deals, well above this year’s daily average of 794.4 million rupees, even as foreign investors exited risk assets.

Foreign investors sold a net 235.4 million rupees worth of shares on Friday, extending the year to date net foreign outflow to 2.22 billion rupees worth shares.

The benchmark share index ended 0.18 percent higher, or up 11.13 points at 6,083.01, its highest since March 24.

The index lost 11.9 percent in the March quarter.

"Some positive sentiment continued among the broker community and investors. But the gains could be short-lived with interest rates being on the high side and fiscal side problems still not being addressed," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Sri Lanka borrowed over 25 percent more last year than in 2014, which included a 23 percent rise in domestic borrowing and a 32 percent jump in foreign borrowing, the finance minister said last week.

Yields on treasury bills increased between 47 and 74 basis points at a weekly auction on Wednesday despite the central bank keeping key rates steady at a policy review on Tuesday.

Shares in Richard Pieris and Company Plc rose 8.33 percent, while conglomerate John Keells Holdings Plc edged up 0.74 percent and Distilleries Company of Sri Lanka Plc gained 1.84 percent.
 

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