Sri Lankan shares edge up; block trades boost turnover
COLOMBO, May 18 (Reuters) – Sri Lankan shares edged up on Wednesday, led by large caps on strong buying by foreign investors, while some large block trades by high-net-worth and institutional investors boosted turnover to a near three-week high.
Retail investors were waiting for cues from the ongoing release of March-quarter earnings, analysts said, while gains were capped due to concerns over a government move to increase value-added tax and impose new taxes, which could hit company bottomlines.
The benchmark stock index rose 0.14 percent, or 9.36 points, to 6,680.15.
Turnover was Rs1.43 billion ($9.75 million), the highest since April 29 and nearly twice this year’s daily average of around Rs784 million.
Foreign investors, whose buying accounted for 73 percent of the total turnover, net bought Rs259.6 million worth of shares. They have net sold Rs3.67 billion worth of shares so far this year.
"The block trade in large caps helped to boost turnover. However, investors are waiting for some direction on interest rates and March earnings," a stockbroker said.
Yields on t-bills, which move in tandem with market interest rates, rose between 11 and 14 basis points at a weekly auction on Wednesday.
Shares of Ceylon Tobacco Company Plc gained 0.9 percent, while top lender Commercial Bank of Ceylon also added 0.9 percent.
The 14-day relative strength index, now in the overbought zone, stood at 75.753 on Wednesday, compared with Tuesday’s 75.128, according to Thomson Reuters data.
A level of 70 and above indicates that the market is overbought.