Bourse rise to near 5-month high

Saturday, 11 January 2014 07:54 -     - {{hitsCtrl.values.hits}}

Reuters: Stocks rose for a fourth straight session to hit a near five-month high on Friday, led by financials on hopes of consolidation in the sector, while foreign investors sold risky assets on a net basis in an overbought market. The main stock index gained 0.23%, or 13.80 points, to end at 6,083.14, its highest close since 22 August. It has gained 2.32% in the last four sessions, with the index in an overbought region. “Investors believe banks and financial shares will gain following the Central Bank’s direction for mergers,” a stockbroker said on condition of anonymity. Shares in DFCC Bank PLC rose 6.06% to Rs. 150.60, while National Development Bank PLC gained 4.34% to Rs. 180.50. In its financial and monetary policy announcement for 2014, the Central Bank revealed plans to merge banks and non-banking financial firms to strengthen financial stability. Analysts said the Central Bank’s interest rate cut last week and the recent fall in T-bill yields had boosted sentiment and helped sustain the gain. The CSE index gained 4.8% in 2013 after losses in the previous two years, giving a return of 2.18% in dollar terms. Many investors locked their funds in risk-free debentures instead of risky assets last year due to a sluggish bourse and falling interest rates. The day’s turnover was Rs. 1.38 billion ($ 10.6 million), surpassing last year’s daily average of about Rs. 828.4 million. Foreign investors were net sellers for the first time in six sessions, selling Rs. 72.04 million worth of shares on Friday. But they have net bought Rs. 97.8 million of shares so far this year. Offshore investors bought a net Rs. 22.88 billion worth of stocks last year.