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Sri Lankan shares end higher; financial stocks lead


AUGUST 31, 2018

COLOMBO, Aug 30 (Reuters) – Sri Lankan shares ended higher on Thursday, moving away from their lowest close in 17 months hit earlier this week, as reports that the main state-owned pension fund would return to the equity market boosted sentiment.

The Employees’ Provident Fund, which had halted equity investments in 2015, is set to resume buying and selling shares, local papers reported on Wednesday, citing Central Bank Governor Indrajit Coomaraswamy’s remarks at an event.

The Colombo stock index ended 0.53 percent higher at 6,076.68, moving further away from its lowest close since March 28, 2017, hit on Tuesday. The bourse posted its third gain in 14 sessions.

The day’s turnover was at 337.9 million rupees ($2.09 million), less than half of this year’s daily average of 814.4 million rupees.

“Market is still on positive sentiment after the central bank governor’s comment. That gave some confidence to local investors, but we don’t expect the positive sentiment to last long,” said Atchuthan Srirangan, assistant manager – research, First Capital Holdings Plc.

“Foreign selling is continuing – which is a worrying sign.”

Foreign investors sold a net 76.9 million rupees of shares on Thursday, extending the net foreign selling so far this year to 4.1 billion rupees worth of shares.

Shares in Commercial Leasing and Fiance Plc ended 20 percent firmer, while Ceylinco Insurance Plc ended 5 percent up and the biggest listed lender Commercial Bank of Ceylon Plc closed 0.9 percent higher.

The central bank had left its key policy rates unchanged, as expected, on Aug. 3, citing its goals of stabilising inflation and fostering sustainable economic growth.

The economy is unlikely to grow more than 4 percent in 2018, falling short of an earlier estimate of 5 percent, Coomaraswamy said early this month.