Shares hits more than 11-wk high

REUTESR: Sri Lankan shares ended at more than 11-week high yesterday as investors bought beverage and banking shares amid foreign buying into the island nation’s risk assets boosted sentiment.

The benchmark Colombo stock index ended up 0.93 percent, or 60.46 points, at 6,582.60, its highest close since May 25.

“The market moved up on thin volumes, but the market is looking better and better with the more stability coming into the market,” said Richard Pieris Securities (Pvt.) Ltd Chief Operating Officer Reshan Kurukulasuriya.Investors hoped that the economic fundamentals would improve after the Central Bank on July 28 surprised the markets with a 50-basis point raise in its main interest rates aimed at curbing stubbornly high credit growth.Foreign investors net bought Rs.62.59 million worth of shares, extending the net foreign inflow to Rs.1.55 billion worth of equities in the last 14 sessions. However, they have sold Rs.3.26 billion worth of shares so far this year.Turnover stood at Rs.675.1 million, less than this year’s daily average of around Rs.731.3 million.

Shares in Nestle Lanka PLC jumped 10.25 percent while Ceylon Tobacco Company PLC gained 1.9 percent and Ceylon Cold Store PLC rose 4.96 percent.

Shares in biggest listed lender Commercial Bank of Ceylon PLC rose 0.96 percent.
Analysts said investors also shrugged off a Supreme Court order asking parliament to stop considering a bill to raise the value-added tax as the draft had not followed due process.
The move could put in jeopardy the government’s ambitious fiscal consolidation plan to reduce the budget deficit to 5.4 percent of gross domestic product from last year’s 7.4 percent.