Sri Lankan shares gain for 6th session; Keells leads

COLOMBO, Oct 28 (Reuters) – Sri Lankan shares rose for a sixth straight session on Wednesday to a more than two-week high despite foreign outflows, led by market heavyweight John Keells Holdings Plc.

Foreign investors were net sellers of 226.4 million rupees ($1.61 million) worth of shares on Wednesday, extending the year-to-date net foreign out flow to 3.12 billion rupees.

The main stock index ended 0.15 percent or 10.61 points up at 7,094.09, its highest close since Oct. 12.

The day’s turnover was 1.14 billion rupees ($8.09 million), just above this year’s daily average of 1.1 billion rupees.

"People are taking some positions and it looks like the interest is coming back to the market," said a stockbroker asking not to be named.

"Retailers have not been active. They are awaiting proper direction and positive sentiment. But the market is looking good and interest level will continue to grow."

Danushka Samarasinghe, head of research Softlogic Stockbrokers, said a $1.5 billion 10-year sovereign bond sale on Tuesday is seen as a positive.

Sri Lanka paid less than it had expected to borrow $1.5 billion via a 10-year sovereign bond on Tuesday, with strong orders helping bring down the yield on the issue to 6.85 percent from an initial guidance of around 7 percent.

However, the borrowing cost for Sri Lanka’s largest eurobond issue was expensive compared with the previous 10-year papers.

Prime Minister Ranil Wickremesinghe is expected to announce the country’s economic policy in the first week of November, outlining the government’s economic priorities ahead of the 2016 budget scheduled for Nov. 20.

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Analysts said a government move to implement a budget proposal for a retrospective tax targeting corporates has dented sentiment.

Shares of conglomerate John Keells Holdings rose 1.52 percent. (Colombo/October 28 2015)

 

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