Bourse steady at over 33-month high

Saturday, 19 July 2014 01:48 -     - {{hitsCtrl.values.hits}}

Reuters: Stocks ended flat on Friday, hovering near a 33-month high struck on Wednesday as profit-taking in diversified shares was offset by gains in telecommunication shares, brokers said. The country’s share index has risen 5.39% so far this month as the yields in risk free Treasury bills and the Central Bank’s key monetary policy rates have fallen to multi-year lows amid continued foreign buying. The main stock index edged up 0.33 points, to 6,722.2, near its highest close since 3 October 2011 hit on Wednesday. “Investors are positive as the interest rates have come down and the consumer demand is rising, which can have an impact on the banking sector,” said Dimantha Mathew, Manager Research at First Capital Equities in Colombo. The Central Bank on Monday kept policy rates steady at multi-year lows for a sixth straight month, as expected, despite private sector credit growth slowing to a 4-1/2-year low. The index is in the overbought region since 3 July. It has risen 13.69% so far this year, Thomson Reuters data showed. Turnover was Rs. 1.3 billion ($ 9.98 million), slightly above this year’s daily average of about Rs. 1.09 billion. Foreign investors were net buyers of Rs. 62.4 million worth of shares on Friday, extending net foreign inflows in stocks to Rs. 10.02 billion so far this year. Shares in Sri Lanka Telecom Plc rose 0.91% to Rs. 55.50, while large cap share Ceylon Tobacco Co Plc rose 0.86% to Rs. 1,112. Hemas Holdings, a diversified conglomerate, fell 1.64% to Rs. 48.1. Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on Treasury bills edged down further at a weekly auction on Wednesday. Analysts said foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities. The market has been on a rising trend since late February due to continued foreign buying and lower interest rates.