Sri Lankan shares rose yesterday in high turnover and closed at their highest in 10 months, as investors took positions two weeks ahead of presidential polls, analysts said.
Sajith Premadasa, the Housing Minister and one of the two presidential front-runners, on Thursday announced his election manifesto, which is seen by analysts as a ‘broader policy framework’.
His close rival Gotabaya Rajapaksa has pledged a tax overhaul that would reduce tax to 8 percent from the current 15 percent and abolish many taxes.
Many political analysts Reuters spoke to have said the tight race between the two presidential candidate was still on.
The benchmark stock index ended 0.7 percent firmer at 6,032.08, its highest close since Jan. 4. The index rose 1.6 percent for the week in its fourth weekly gain, but is down 0.34 percent for the year.
Financial and telecom stocks were among the top gainers, with Ceylon Tobacco Company Plc jumping 4.6 percent, while Distilleries Company of Sri Lanka rose 2.9 percent, Hemas Holdings Plc finished up 0.62 percent and Sri Lanka Telecom Plc ended 1.9 percent firmer. The rupee ended 0.03 percent weaker at 181.10/25 per dollar, compared with Thursday’s close of 181.05/30. The currency is up 0.83 percent so far this year.
Foreign investors were net sellers of riskier assets for the seventh straight session on Thursday. They sold net Rs.123.5 million (US$ 681,944) worth of shares, extending the year-to-date net foreign selling to Rs.4.44 billion of equities, according to index data. Equity market turnover was Rs.1.79 billion (US$9.88 million), nearly three times of this year’s daily average of about Rs. 667.6 million. Last year’s daily average was Rs.834.0 million.
Meanwhile, foreign investors bought government securities on a net basis for the first time in three weeks, buying a net Rs. 1.97 billion worth of government securities in the week ended Oct. 23.
Total foreign outflows from government securities through Oct. 23 stood at Rs.53.63 billion, according to Central Bank data. Sri Lanka’s Central Bank left its key rates unchanged on Oct. 11 after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.