Sri Lankan stocks hit 3-mth closing high led by banks, construction shares

COLOMBO, Aug 19 (Reuters) – Sri Lankan shares hit a three-month closing high on Friday as investors bought banking and construction stocks, brokers said.

Construction shares have been rising ever since the government gave its consent to restart a $1.4 billion port city deal on hopes the sector would see a boom, brokers said.

Sri Lanka’s government on August 12 agreed on a new version of its $1.4 billion real estate agreement with China after changing the terms and blocking the outright sale of land – as part of a project covering a square mile right next to the capital’s port.

The benchmark Colombo stock index ended 0.14 percent higher, or 8.99 points, at 6,602.24, its highest close since May 20.

The index rose 1.23 percent this week, its third straight week of gains.

"Today, the market is up on the bullish buying interest in the construction sector," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

"There could be some profit-taking, but we don’t see a huge downside, with investor confidence improving on the overall economy."

Turnover stood at Rs1.45 billion ($9.97 million), nearly double this year’s daily average of around Rs743.8 million.

Foreign investors net sold Rs265.9 million worth of shares on Friday, extending the year to date net foreign outflow to Rs3.27 billion ($20.63 million) worth of equities.

They have, however, net bought Rs1.38 billion worth of shares so far this month.

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Shares of Dialog Axiata Plc jumped 2.65 percent, while Access Engineering Plc rose 2.81 percent and DFCC Bank Plc climbed 2.26 percent.

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