ECONOMYNEXT – Sri Lanka stocks closed higher on Tuesday (07), led by shares in the export businesses and manufacturing while Lanka IOC, the fuel retailer unit of state-run Indian Oil Corporation gained over the parent company investing in the island nation’s oil tank farm, brokers said.
All Share Price Index ended with a 0.49 points gain to close at 11,088.17.
The S&P SL20 index of the most liquid share rose 0.44 per cent or 17.42 points to close at 3,964.42.
“Export and manufacturing companies gained on better earnings expectations. However, the downside risks are currency depreciation and eroding purchasing power,” a Colombo-based broker said.
“Lanka IOC is gaining after the recent finance minister’s visit to India where he discussed possible investments into Trincomalee oil tank farm,” he said referring to Sri Lanka’s Eastern Port city where it has 99 oil storage tanks.
After Finance Minister Basil Rajapaksa’s visit, the government said as one of the four pillar strategies to address Sri Lanka’s current economic situation it discussed “Energy security package that would include a line of credit to cover import of fuel from India, and an early modernization of Trincomalee Tank Farm”.
Analysts said the market expects Lanka IOC to invest more in the tanks and distribution with the credit line.
Foreign investors, however, sold a net of 38.5 million rupees’ worth of shares and the bourse has suffered a net foreign outflow of 49.4 billion rupees so far this year.
Analysts have cautioned about signs of market peaking off because of heavy speculative trading amid expert investors are moving aside while newcomers are driving the herd mentality with speculators are cashing out or moving into more fundamentally strong counters.
The day’s turnover was 6 billion rupees above this year’s average daily turnover of 4 billion rupees.
The gain was led by Expolanka, Richard Pieris and Company and Melstacorp.
Expolanka, the market heavyweight which has a significant component of export and freight business, gained 1.53 percent to close at 299.50 rupees a share.
Richard Pieris and Company closed 8.11 percent up at 20.00 rupees a share and Melstacorp up 3.27 percent to close at 56.90 rupees a share.
Lanka IOC gained 11.9 percent to 34.80 rupees.