Sri Lanka stocks up 0.8-pct, foreign buying in JKH

ECONOMYNEXT – Sri Lanka stocks gained 0.85 percent on foreign buying into John Keells Holdings and domestic buying into listed banks, with a turnover of 1.3 billion rupees, brokers said.

The Colombo All Share Index gained 55 points to close at 6,514.73 while the S&P Index of more liquid stocks rose 1.03 percent gaining 38.67 points to 3,783.93.

Foreign investors were net buyers of Rs357 million worth of shares. Net foreign buying into John Keels amounted to 260 million rupees.

"Foreign investors looking for exposure to Sri Lanka tend to pick John Keells Holdings, and banking stocks because they’re liquid. JKH has already gained 5 percent this year," says Kanishka Perera, Head of Research, Asia Securities.

JKH closed 2.6 percent higher at Rs160.

Foreign selling was mainly in Lion Brewery at Rs116.6 million. The stock closed unchanged from the previous day at Rs540.

Crossings or off-the-floor negotiated deals accounted for 37 percent of the turnover with two crossings each in Sampath Bank and John Keells and one each in Dialog, Chevron Lubricants, Commercial Bank and Melstacorp, according to Asia Securities.

Swarnamahal Finance, which has been barred by the regulator from borrowing and lending ahead of a restructure, gained 33 percent to close at 80 cents as investors positively viewed the Central Bank’s intervention to restructure the company.

"Finance companies overall are still attractively valued," Perera says. "Although they engage in riskier lending they are not very different to banks. Also, they don’t have large capital requirements compared to banks and don’t have to go to shareholders for extra funding,"

The Central Bank is proposing to increase the minimum capital requirement for finance companies from 10 to 12 percent. (COLOMBO, January 05, 2018).





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