Shares hit over 9-week high despite foreign outflows


Shares rose to over nine-week high on Thursday as local investors picked up certain stocks on earning hopes, but foreign investors exited from the country’s risky assets.

The main stock index closed 0.29% or 20.61 points firmer at 7,212.90, its highest close since 3 March. It has gained 4.52% since the Central Bank cut key rates on 15 April, while yields on T-Bills have fallen 44-57 basis points since then.

“There was some volatility in the market with some profit taking. But there were some local buyers,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd. “Foreign selling is simply because of the profit taking.”

Net foreign outflow from equities was Rs. 130.5 million ($978,994.75) on Thursday, extending net outflows of Rs. 740.9 million for the past four sessions. Foreign investors, however, have bought a net Rs. 3.1 billion worth of shares so far this year.

Turnover stood at Rs. 1.16 billion, above this year’s daily average of around Rs. 1.07 billion.

Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in wait-and-watch mode before the Parliamentary elections.

Parliament passed reforms last week to reduce some of the President’s powers, although they were far fewer than President Maithripala Sirisena had promised.

Shares of Cargill’s Ceylon Plc jumped 7.26%, while Commercial Leasing and Finance Plc gained 7.14%. Leading mobile phone operator Dialog Axiata Plc rose 1.77%. (Reuters)