Sri Lankan shares nudge higher; concerns remain
COLOMBO, May 22 (Reuters) – Sri Lankan shares edged up on Friday, but investors awaited clarity on the political front and the timing of a parliamentary election as concerns over political stability weighed on sentiment, stockbrokers said.
The main stock index gained 0.21 percent, or 15.05 points, to close at 7,288.74. The index rose 0.4 percent for the week, positing its sixth straight weekly gain
"The market is waiting for the election announcement. Investors will wait until the parliamentary election is over," a stockbroker said on condition of anonymity.
"A new stable government with some strong economic policy measures would boost confidence," the stockbroker said.
Analysts said the market shrugged off the central bank’s decision to keep the key monetary rates steady at record lows.
The central bank in its monetary policy statement said on Friday the private sector credit grew 13.9 percent on-year in March from 12.6 percent in February. Analysts said the credit growth will help boost banking and financial shares.
Turnover was 904.6 million rupees ($6.77 million), above this year’s daily average of about 1.14 billion rupees.
Foreign investors were net sellers on Friday for a third straight session, offloading 83.9 million rupees worth of shares. But they have been net buyers of 5.93 million rupees worth of stocks so far this year.
Lanka Orix Leasing Co Plc gained 1.8 percent, while shares in LB Finance jumped 3.56 percent. Illiquid shares such as Nestle Lanka Plc and Carson Cumberbatch Plc gained 1.84 percent and 3.36 percent respectively.
Political uncertainty due to Prime Minister Ranil Wickremesinghe-led UNP not having a parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.
The index has gained 5.6 percent since the rate cut.