Bourse edges up; correction seen

Tuesday, 22 July 2014 00:47 - - {{hitsCtrl.values.hits}}

Reuters: Stocks hovered around 33-month highs on Monday, as local investors took advantage of low interest rates to shift funds from fixed income assets to risk assets despite foreign outflows, brokers said. The main stock index ended up 0.51%, or 34.32 points, at 6,756.52, near its highest close since 3 October 2011 hit on Wednesday. “There would be miner corrections here and there, but we see continued buying,” said a stockbroker asking not to be named. “There is stability in the market. With the positive outlook, investors are holding on.” The share index has gained 5.92% so far this month. Turnover was Rs. 904 million ($ 6.94 million), slightly below this year’s daily average of about Rs. 1.09 rupees. Foreign investors were net sellers for the first time in the last eight sessions, selling Rs. 215.13 million worth of shares on Monday. But they have been net buyers of shares worth Rs. 9.8 billion rupees o far this year. Shares of Lion Brewery (Ceylon) Plc rose 4.05% to Rs. 667.60, while Commercial Bank of Ceylon Plc rose 1.99% to Rs. 143.30. The market is on the rise because investors have little options in other instruments as yields of treasury bills and the Central Bank’s key monetary policy rates have fallen to multi-year lows amid continued foreign buying. Yields on Treasury bills edged down further at a weekly auction on Wednesday. The index is in the overbought region since 3 July. It has risen 14.27% so far this year. Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said. Analysts said foreigners have been buying risky assets because they see value in them.

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