Sri Lankan shares end up on Commercial Credit stake sale
COLOMBO, Oct 4 (Reuters) – Sri Lankan stocks closed at their highest level in six weeks on Tuesday, led by record gains in Commercial Credit and Finance Plc after Thailand’s Group Lease PCL bought a 30 percent stake in the firm.
Motorcycle lessor Group Lease has acquired a 30 percent stake in Commercial Credit and Finance PLC (CCF) for $70 million, the company said on Monday, in its first major expansion outside Southeast Asia.
Shares of CCF touched a record high of 77 rupees during the session, before closing at 72.80 rupees.
"We saw strong interest in other financial shares as well after this deal," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
The benchmark index of the Colombo Stock Exchange ended firmer by 0.26 percent, or 17.02 points, at 6,591.41, its highest close since Aug. 23.
"We are bullish on the outlook because the market interest rates have fallen in the last one month. Large investors are still waiting to see the budget. But we see some people are ready to take risk in medium-term and buying now," Mathew added.
Treasury bill yields have slipped between 48 basis points and 62 basis points in the last four weekly auctions through Wednesday, the central bank data showed.
Analysts said they expected the index to rise this week due to the fall in the return on fixed income assets.
Foreign investors bought a net 10 million rupees worth of shares on Tuesday. But they have been net sellers of 2.85 billion rupees worth of equities so far this year.
Turnover stood at 621.7 million rupees ($4.26 million), less than this year’s daily average of 758.7 million rupees.
Ceylon Tobacco Company PLC climbed 2.3 percent. However, analysts said the company’s shares are likely to fall on Wednesday after the government imposed a 20 percent tax on tobacco with effect from Tuesday.