EconomyNext – Sri Lankan stocks ended higher Wednesday driven up by investors enthusiastic over improved corporate profits being reported for the December 2014 quarter and future earnings prospects as costs come down, brokers said.
The benchmark All Share Price Index rose 0.8 percent or 54.71 points to close at 7,359.41 while the S&P SL20 index, which tracks the top 20 largest and most liquid stocks, closed at 4,116.41, up 44.81 points or 1.10 percent.
Turnover was 2.3 billion rupees, supported by several crossings or off-market negotiated deals as well as across-the-board buying.
"Investors were quite bullish today with interest mainly on the ‘big cap’ stocks and also banks and manufacturing firms," said Dimantha Mathew, Manager Research at First Capital Equities.
Investors were buying into companies whose latest quarterly earnings were very good.
"Especially in the manufacturing sector, we know earnings are going to be good because of the fall in oil and gas prices. There was heavy trading in them," Mathew said.
There was continued interest in John Keells Holdings, which foreign investors were believed to be buying.
"JKH went up eight rupees yesterday and today it held at around 219-odd rupees, which means there’s more buying interest," Mathew said. "Yesterday also there was foreign buying."
He said investors also felt positive as the new government was consolidating its position and its direction getting clearer.
Although interest rates had begun to rise, Mathew said this was unlikely to dampen interest in equities because rates were still low compared with previous years and an anticipated rise in consumption should improve corporate earnings.
"Since there’s going to be a huge increase in disposable income with prices coming down, a lot of investors are looking at consumer-related companies," Mathew said.