Shares rebound from 17-mth closing low

Thursday, 30 August 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares rebounded on Wednesday, from their lowest close in 17 months, boosted by local media reports citing the Central Bank Governor that the main State-owned pension fund will return to the equity market.

The Employees’ Provident Fund, which had halted equity investments in 2015, is set to resume buying and selling shares, local papers reported on Wednesday citing Central Bank Governor Indrajit Coomaraswamy’s remarks at an event.

The Colombo stock index ended 0.57% higher at 6,044.67, edging up from its lowest close since 28 March 2017 hit on Tuesday. The bourse posted its second gain in 13 sessions.

The day’s turnover was at Rs. 1.1 billion ($6.8 million), more than this year’s daily average of Rs. 817.4 million.

“Market bounced back with healthy turnover,” said Hussain Gani, Deputy CEO, Softlogic Stockbrokers. “It’s a good sign that local investors are back after the central bank governor said government institutions will invest in equities.”

Foreign investors sold a net Rs. 590.2 million of shares on Wednesday, extending the net foreign selling so far this year to Rs. 4 billion worth of shares.

Shares in Ceylon Tobacco Company Plc rose 1.9%, while conglomerate John Keells Holdings Plc ended 1.4% higher. The biggest listed lender Commercial Bank of Ceylon Plc closed 1.7% firmer.

The Central Bank had left its key policy rates unchanged, as expected, on 3 August, citing its goals of stabilising inflation and fostering sustainable economic growth. The economy is unlikely to grow more than 4% in 2018, falling short of an earlier estimate of 5%, Coomaraswamy said early this month.