Bourse at 8-week closing high on earnings hope

Friday, 1 May 2015 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: Shares edged up to their highest closing level in more than eight weeks on Thursday, as retail investors picked up risky assets in moderate volumes on hopes companies would report better earnings and as low rates perked up sentiment. The passage of constitutional reforms that would help establish independent bodies for good governance also buoyed the market, analysts said, adding however concerns over political stability remained. Sri Lanka’s Parliament passed reforms Tuesday to reduce some of the President’s powers, although they were far fewer than President Maithripala Sirisena had promised. The main stock index edged up 0.08% to 7,179, its highest closing level since 6 March. It has gained 4% since the Central Bank cut key rates on 15 April, while yields on t-bills have fallen 41-51 basis points since then. The index gained 5.26% in April. “We saw a bit of activity taking place with select buying on fundamentally sound stocks on earning expectations,” said Dimantha Mathew, research manager at First Capital Equities Ltd. Turnover stood at Rs. 801.8 million ($ 6.02 million), compared with this year’s daily average of around Rs. 1.06 billion. The market saw net foreign outflow of Rs. 65 million worth of shares on Thursday. Foreign investors have bought net Rs. 3.74 billion worth of shares so far this year. 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 leading mobile phone operator Dialog Axiata Plc rose 1.77%, while Finlays Colombo Plc jumped 9.41%. The index lost 6.6% last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates. Sri Lanka’s stock and foreign exchange markets will be closed on Friday for May Day and on Monday for a Buddhist religious holiday. Normal trading will resume on Tuesday.