Sri Lankan shares rise to over 1-wk closing high; policy awaited

COLOMBO, Oct 22 (Reuters) – Sri Lankan shares rose to a more than one-week closing high on Thursday, led by blue chips such as John Keells holdings, but trading was dull as investors were cautious ahead of a key policy statement by the government.

The main stock index ended 0.19 percent, or 13.18 points, firmer at 7,068.85, its highest close since Oct. 13.

Turnover was 778.8 million rupees ($5.52 million), lower than this year’s daily average of 1.1 billion rupees.

"It’s a dull day. No big trades took place. But we saw foreigners were slowly entering the market," said Yohan Samarakkody, head of research at SC Securities (Pvt) Ltd.

Foreign investors, who have been net sellers of 2.92 billion rupees worth of equities so far this year, bought a net 2.99 million rupees worth shares on Thursday.

Samarakkody said investors were waiting for the government’s economic policy. "The proper direction could be seen after the budget."

Prime Minister Ranil Wickremesinghe is expected announce the government’s economic policy in the first week of November outlining the government’s economic priorities ahead of the 2016 budget scheduled on Nov. 20, Finance Minister Ravi Karunanayake said.

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

Shares of John Keells rose 2.04 percent, while Ceylon Tobacco Co Plc increased 0.26 percent and Cargills (Ceylon) Plc gained 9.57 percent.

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