Sri Lanka shares hit over 9-week high despite foreign outflows
COLOMBO, May 7 (Reuters) – Sri Lankan shares rose to over nine-week high on Thursday as local investors picked up certain stocks on earning hopes, but foreign investors exited from the island nation’s risky assets.
The main stock index closed 0.29 percent or 20.61 points firmer at 7,212.90, its highest close since March 3. It has gained 4.52 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 44-57 basis points since then.
"There was some volatility in the market with some profit taking. But there were some local buyers," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.
"Foreign selling is simply because of the profit taking."
Net foreign outflow from equities was 130.5 million rupees ($978,994.75) on Thursday, extending net outflows of 740.9 million rupees for the past four sessions. Foreign investors, however, have bought a net 3.1 billion rupees worth of shares so far this year.
Turnover stood at 1.16 billion rupees, above this year’s daily average of around 1.07 billion rupees.
Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in wait-and-watch mode before the parliamentary elections.
Sri Lanka’s parliament passed reforms last week to reduce some of the president’s powers, although they were far fewer than President Maithripala Sirisena had promised.
Shares of Cargills Ceylon Plc jumped 7.26 percent, while Commercial Leasing and Finance Plc gained 7.14 percent. Leading mobile phone operator Dialog Axiata Plc rose 1.77 percent.