Stock market up on foreign buying, hit more than 3-week closing high

Friday, 25 March 2016 00:12 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares rose in thin trade to hit a more than three-week closing high on Thursday as foreign investors net bought stocks for the first time in nine sessions, but growth woes and rising bond yields capped gains ahead of a long weekend.

Foreign investors bought a net Rs. 33.1 million worth of shares on Thursday, but they have sold net Rs. 2.06 billion worth shares so far this year.

Sri Lanka’s economy is expected to expand 5.3 % in 2016, government data showed last week, but analysts say tight monetary and fiscal policies may curb growth.

Rising yields on treasury bills, which have been on the up following an unexpected interest rate hike by the Central Bank in mid-February, have spurred investor appetite for fixed interest-rate bearing assets, dealers said.

Yields on t-bills, which are hovering at more than two-year highs, jumped by 62-90 basis points at a weekly auction on Monday.

The benchmark share index, ended 0.31 %, or 18.95 points firmer, at 6,092.45, the highest since March 1.

“We expect this volatility to continue and market to trade between 5,800 and 6,000. Many investors are on the sidelines waiting to see the direction of the economy,” said First Capital Equities Ltd head of research Dimantha Mathew.

Shares in conglomerate John Keells Holdings Plc rose 1.33 %, while Ceylon Tobacco Company Plc rose 0.52 %.

Turnover stood at Rs. 488.2 million ($3.34 million) on Thursday, less than this year’s daily average of Rs. 796.9 million.

The Sri Lankan stock market will be closed on Friday for a public holiday.