Bourse up on local buying

Thursday, 30 January 2014 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: Shares rose on Wednesday, led by conglomerate John Keells Holdings, and as local institutions bought stocks after interest rates dropped though foreign investors sold risky assets ahead of a US Federal Reserve decision on trimming stimulus. The main stock index gained 0.54%, or 33.31 points, to 6,252.14, near its highest close since 12 June hit on Friday. Interest rates in Treasury bills eased at a weekly auction on Wednesday to multi-year lows, making fixed-income assets unattractive for investors. “Now we see some local institutions buying shares when foreigners are selling. We didn’t see that up to now. Gradually local (investor) confidence is building up,” said a stockbroker on condition of anonymity. Shares in John Keells Holdings rose 2.03%. The company said after market close that its December-quarter net profit rose 17% year-on-year to Rs. 3.39 billion. Sri Lanka’s only specialised Islamic bank, Amana, which started trading for the first time on Wednesday, ended at Rs. 5.90, 15.7% lower than its IPO price of Rs. 7. Foreign investors were net sellers of Rs. 18.77 million ($ 143,500) worth of shares, but have been net buyers of Rs. 1.04 billion so far this year. They had bought Rs. 22.88 billion of stocks last year. The index has gained 5.2% in the last 15 sessions, including last week’s 2% gain, which analysts attributed to the Central Bank’s rate cut on 2 January and the recent fall in T-bill yields. The index has been in an overbought region since 7 January, Thomson Reuters data shows. It has risen 5.7% so far this year, following a 4.8% gain in 2013, after having fallen in the previous two years. The day’s turnover was Rs. 808 million, less than last year’s daily average of about Rs. 828.4 million.