Bourse closes at two-month high on hopes of better earnings

Wednesday, 6 May 2015 00:29 - - {{hitsCtrl.values.hits}}

Reuters: Shares rose to a more than two-month high on Tuesday due to local buying in large-caps, while foreign investors exited from risky assets. The main stock index rose 0.32% to 7,202.11, its highest closing level since 4 March. It has gained 4.36% since the Central Bank cut key rates on 15 April, while yields on t-bills have fallen 40-50 basis points since then. “Confidence is slowly coming into the market after the passing of the 19th Amendment and expected good earnings,” said Dimantha Mathew, research manager at First Capital Equities Ltd. Sri Lanka’s Parliament passed reforms last week to reduce some of the president’s powers, although they were far fewer than President Maithripala Sirisena had promised. The passage of constitutional reforms that would help establish independent bodies for good governance also buoyed the market, analysts said. Concerns, however, remain over political stability. The market saw a net foreign outflow of Rs. 28.6 million ($ 214,876) from equities on Tuesday. Foreign investors have bought a net Rs. 3.72 billion worth of shares so far this year. Turnover stood at Rs. 1.11 billion, the highest since 16 April and more than this year’s daily average of around Rs. 1.06 billion. Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in a wait-and-watch mode before the parliamentary elections. Shares of Distillers Co of Sri Lanka Plc rose 2.1%, while Ceylon Tobacco Co Plc gained 0.7%.

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