Shares at 18-month high on foreign buying; Keells leads

Saturday, 18 May 2013 01:15 - - {{hitsCtrl.values.hits}}

Reuters: Shares rose on Friday to hit a new 18-month high on foreign buying, with market heavyweight John Keells Holdings leading the rally, while the rupee ended weaker on corporate dollar demand.

The main stock index rose 1.49%, or 93.70 points, to close at 6,380.70, its highest since 4 November 2011.

Foreign investors were net buyers of Rs. 335.3 million ($ 2.67 million) of shares, extending net foreign inflows this year to Rs. 11.19 billion.

“The market is up on the foreign buying,” a stockbroker said on condition of anonymity. “With the market moving up, institutional investors are also aggressively getting into their positions.”

A fall in interest rates of fixed income assets has also helped boost sentiment in the share market as retail investors, who dominate the island nation’s bourse in terms of volume, shift to equities from government securities, dealers said.

Yields in Treasury bills fell in the range of 29 basis points to 45 bps on Wednesday after the Central Bank cut key policy rates by 50 bps last Friday, following some of its regional peers, to boost economic growth amid subdued demand.

Shares in John Keells Holdings rose 2.48% to Rs. 284.90, their all-time closing high.

Market turnover was Rs. 1.4 billion on Friday, more than this year’s daily average of Rs. 1.04 billion.

The rupee ended weaker at 126.30/35 from Thursday’s close of 125.80/85 on corporate-related dollar outflows, currency dealers said.

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