Sri Lanka shares post near four-month closing high; John Keells leads
COLOMBO, May 3 (Reuters) – Sri Lankan shares posted their highest close in nearly four months on Tuesday, led by market heavyweight John Keells Holdings Plc, while a loan agreement with the International Monetary Fund last week also boosted sentiment.
The benchmark stock index rose for the fifth straight session and ended 1.03 percent, or 66.84 points, firmer at 6,583.10, its highest close since January 11.
"The market was bullish, with some buying interest coming into bluechips and mid caps. The main reason was due to the positive sentiment with the IMF announcement," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.
"Still, some investors are waiting to see the direction," he said, referring to the uncertainty over market interest rates.
Market interest rates had been rising until last week, as the Central Bank allowed them to rise in a bid to ease downward pressure on the rupee.
The IMF said on Friday that it reached an agreement with the Sri Lankan government for a $1.5 billion bailout to help the island nation avert a balance of payments crisis.
The three-year loan will require IMF board approval in June, the global lender said, and is subject to Sri Lanka implementing reforms, including streamlining the tax code and reducing a bloated deficit.
Last week, the Central Bank kept benchmark rates unchanged as expected, while yields on short-term government securities were also steady at a weekly auction on Wednesday.
The Central Bank’s measures signalled that market interest rates may not rise as was earlier expected.
Turnover was Rs621.5 million ($4.3 million) on Tuesday, less than this year’s daily average of around Rs775.8 million.
Foreign investors, who have been net sellers of Rs2.96 billion worth of shares so far this year, were net buyers of Rs29.6 million worth of equities.
John Keells Holdings shares jumped 1.74 percent, while Ceylon Tobacco Company rose 1.08 percent.