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Sri Lankan shares climb to near 2-month closing high


JANUARY 5, 2018

COLOMBO, Jan 5 (Reuters) – Sri Lankan shares rose on Friday, closing the first week of the new year on a firm note, on the back of heavy foreign buying in blue chips.

The Colombo Stock Index ended 0.85 percent firmer at 6,514.73, its highest close since Nov. 11.

It rose 2.3 percent this week, in its second consecutive weekly rise.

Foreign investors net bought shares worth 357.1 million rupees ($2.33 million) on Friday, extending the net foreign inflow in this year to 1.96 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

Turnover stood at 1.4 billion rupees on Friday, more than last year’s daily average of 915.3 million rupees.

Shares in conglomerate John Keells Holdings Plc rose 2.6 percent, Dialog Axiata Plc gained 3.1 percent and Melstacorp Ltd climbed 3.1 percent.

There was continued buying interest with an added interest in blue chips, said Dimantha Mathew, head of research at First Capital Holdings.

“There is renewed interest from foreign investors which is a good sign,” said Mathew, adding that he expected the positive trend to continue due to declining market interest rates.

Treasury bill rates fell 188 basis points to 216 basis points between March and end-December 2017, mainly driven by foreign investors buying treasury bonds, resulting in declining market interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5 percent, bouncing back from an anticipated four-year low of less than 4 percent last year, central bank Governor Indrajit Coomaraswamy said on Wednesday.

The central bank kept its benchmark interest rates unchanged last week, saying inflation and private sector credit growth have cooled to a manageable level as policy makers focus on supporting a slowing economy. ($1 = 153.4500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

 First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka