Stock market hits near 7-month closing high on foreign buying

Reuters: Shares closed at a near seven-month high in heavy trading on Thursday as foreign buying for 25 sessions in a row took net inflows into equities to Rs. 13.1 billion ($ 86.1 million) and boosted sentiment.

Foreign investors bought shares worth Rs. 810 million on a net basis in the session, bringing the year-to-date net equity inflows to Rs. 14.7 billion.

The Colombo stock index gained 0.85% at 6,571.65, its highest close since 7 October.

The index has climbed 10% in the 20 sessions through Thursday, having risen for 17 sessions in that period.

It added 2.1% last week, marking its fourth week of gains.

“Foreign buying is now spreading to some other counters from John Keells. Foreigners see value in these stocks and local investors have been waiting for investor confidence,” said Deputy CEO Hussain Gani at Softlogic Stockbrokers. Turnover stood at Rs. 1.84 billion, more than double this year’s daily average of Rs. 894.2 million.

Market heavyweight John Keells Holdings gained 1.8%, while top lender Commercial Bank of Ceylon rose 1.9%.

Rupee little changed; yields fall 

on hike in bond borrowing limit

Reuters: The rupee closed steady on Thursday in dull trade, but local bond yields fell after the government approved a proposal to double the borrowing limit on Sri Lanka Development Bonds to $ 3 billion this year, dealers said.

The Government said on Wednesday it approved the proposal with an aim to increase dollar liquidity.

Local t-bill yields slipped 9 basis points at a weekly auction soon after the government announcement.

Rupee forwards were active, with two-week forwards closing at 153.15/30 per dollar, nearly unchanged from Wednesday’s close of 153.10/30.

“There were a lot of activities in the bond market and the yields came down by 25 basis points after the announcement on the SLDB,” a currency dealer said, asking not to be named.

The broader market was also waiting for approval from the International Monetary Fund on disbursement of the third tranche of a $1.5 billion loan and through a proposed sovereign bond issue in May, dealers said.

Sri Lanka has seen a rise in foreign inflows into equities and government securities since early this month, with foreign investors buying shares worth a net Rs. 13.1 billion in 25 consecutive sessions through Thursday.

Foreign investors have also net bought government securities worth Rs. 4.17 billion in the week ended 19 April, although they have net sold 58 billion rupees worth of government bonds so far this year.