CSE ends higher, foreign buying boosts sentiment

Wednesday, 6 June 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan shares ended firmer on Tuesday, recovering from their lowest close in over five months hit in the previous session, led by diversified and financial stocks while foreign investor purchases boosted sentiment.

Foreign investors bought net 182.9 million rupees ($1.16 million) worth of equities on Tuesday, but the market has witnessed a year-to-date net foreign outflow to 641.1 million rupees worth of shares.

The Colombo stock index closed 0.23% higher at 6,409.51.

“Market is positive mainly due to the foreign and local buying in John Keells and Sampath Bank,” said Hisham Haniffa, assistant manager, Softlogic Stockbrokers (Pvt) Ltd.

“Investors are picking up Keells after the recent sell-off.”

Most of the investors have adopted the wait-and-watch approach, hoping for some positive news especially on the economic front, analysts said.

Turnover was 680.6 million rupees, well below this year’s daily average of 991.1 million rupees.

A weaker rupee, political uncertainty and the recent fuel price hike weighed on sentiment in the past week, as local investors mostly remained on the sidelines as they gauged the impact of the floods that killed 24 people in the island nation over the past two weeks, brokers said.

The rupee hit a fresh low of 158.80 per dollar on Friday owing to dollar demand from foreign banks and importers, but ended steady on late inflows from remittances.

Shares in conglomerate John Keells Holdings Plc ended 1.9% higher, while Ceylon Tobacco Co Plc ended 1.0% up, Nestle Lanka Plc closed 2.7% firmer and Sampath Bank Plc ended up 2.4%.

Sri Lanka Telecom Plc closed 3.5% higher and Dialog Axiata Plc ended 1.4% firmer.

Foreign investors, who mostly sold shares of John Keells last week, bought the market heavyweight after low share prices “made it more attractive”, stockbrokers said. MSCI Frontier Markets 100 Index, which captures large- and mid-cap representation across 29 frontier markets, removed Keells from its index, triggering the foreign selling.