Shares end at near one-month closing high

REUTERS: Sri Lankan stocks yesterday posted a third straight session of gains to end at a near onemonth closing high, led by gains in financial stocks, a day after yields in T-bills dropped. The benchmark index of the Colombo Stock Exchange ended up 0.25 percent, or 15.98 points, at 6,528.30, its highest close since September 2.

The Central Bank’s widely expected decision on Wednesday to hold the rates steady suggested that policymakers were keen to support a slowing economy even as they kept a tight leash on rampant credit growth. Treasury bill yields fell between 16 basis points and 33 basis points after the rate decision. Analysts said they expected the stock index to rise this week due to the fall in the return on fixed income assets.

The bank has tightened policy three times since December. After four consecutive weekly losses, the index had posted a weekly gain of 0.1 percent last week. “The market is poised to move up. We see retail buying coming into the market,” said Richard Pieris Securities (Pvt.) Ltd Chief Operating Officer Reshan Kurukulasuriya. “All economic indicators are also helping the market to move up. Market will move further up after the budget,” he said referring to 2017 budget, scheduled to be presented in the parliament on November 10. Foreign investors bought a net Rs.6.9 million worth of shares yesterday.

But they have been net sellers of Rs.2.95 billion worth of equities so far this year. Turnover stood at Rs.479.4 million (US $ 3.27 million), less than this year’s daily average of Rs.753.2 million. Shares in Lanka ORIX Leasing Company PLC climbed 2.5 percent while the biggest-listed lender Commercial Bank of Ceylon PLC edged up 0.7 percent.