Shares end at over 5-week closing high

Tuesday, 4 October 2016 00:02 -     - {{hitsCtrl.values.hits}}

Reuters:  Stocks ended up for a fifth straight session to post a more-than-five-week closing high on Monday, led by conglomerate John Keells Holdings , as hopes over better macro-economic conditions helped boost sentiment.

The day’s turnover was boosted by foreign institutional investors.

The benchmark index of the Colombo Stock Exchange finished up 0.61%, or 39.62 points, at 6,574.39, its highest close since 25 August.

“Investors are bullish given the better outlook for macroeconomic fundamentals,” said Acuity Stockbrokers COO Prashan Fernando.

Sri Lanka’s consumer prices rose 3.9% in September from a year earlier, at a slightly slower pace compared with the 4%  in the previous month. Stockbrokers said the market believes the central bank’s tightening measures have begun to act, which leads to a possibility of lower rates in future. Central Bank Chief Indrajith Coomaraswamy’s positive comments, published in local newspapers over the weekend, also helped boost sentiment, they added.

Last week, the central bank’s decision to hold key monetary policy rates steady, after tightening policy three times since December, suggested that policy makers were keen to support a slowing economy, analysts said. The gain also comes after Treasury bill yields fell between 16 basis points and 33 basis points after the rate decision on Wednesday.

Analysts said they expected the stock index to rise this week due to the fall in the return on fixed income assets. Foreign investors bought a net Rs. 84.8 million worth of shares on Monday. But they have been net sellers of Rs. 2.86 billion worth of equities so far this year.

Turnover stood at Rs. 1.32 billion ($8.99 million), more than this year’s daily average of 759.4 million rupees.

John Keells Holdings Plc climbed 1.3 %, while the biggest-listed Lender Commercial Bank of Ceylon Plc rose 2.15%. Shares in Lion Brewery PLC jumped 12.4% as market expects better earnings after its plant, hit by the floods in May, is ready to operate, stockbrokers said.