CSE extends gains, foreign investors buy into John Keells

Reuters - Sri Lankan shares rose for a second straight session on Thursday and posted their highest close in more than two weeks, as foreign investors continued to buy into market heavyweight John Keells Holdings after recent selloff.

The Colombo stock index closed 0.57% higher at 6,155.41, its highest close since July 25. The index has declined about 3.4% so far this year.

Turnover was 478.4 million rupees ($2.99 million) on Thursday, compared with this year’s daily average of 847.3 million rupees.

“Foreign buying in Keells helped the market gain. Other big caps also helped,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“The market should continue with sideway movements.”

Foreign investors bought shares worth a net 66 million rupees, after having sold a net 2.9 billion rupees worth of equities so far this year.

Shares of John Keells, which accounted for nearly a fifth of the day’s turnover, rose 2.3%, while Ceylon Tobacco Co Plc gained 1.2%.

The gain came after excess liquidity in the market put pressure on short-term interest rates.

The central bank left its key policy rates unchanged as expected on Friday, citing its goals of stabilising inflation and fostering sustainable economic growth.

Central bank Governor Indrajit Coomaraswamy said the economy was unlikely to grow more than 4% in 2018, falling short of an earlier estimate of 5%.