Shares recover from 4-1/2-month low on foreign buying

REUTERS: Sri Lankan shares yesterday edged up from their lowest close in more than four months hit in the previous session, as foreign investors bought battered shares.

The Colombo stock index ended 0.02 percent higher at 6,362.18, recovering from its lowest close since April 17 hit on Wednesday. The bourse ended 0.3 percent lower last week, its seventh straight weekly fall. As of Wednesday’s close, it shed more than 4.6 percent since July 27.

Shares of Lanka Orix Leasing Company PLC ended 6.7 percent higher, while Ceylon Cold Stores PLC closed up 1.0 percent and Melstacorp Ltd ended 0.9 percent firmer.

Foreign investors net bought Rs.332.1 million Sri Lankan worth of shares, extending the year-to-date net foreign inflow to Rs.27.7 billion worth equities.

“Market is up with some foreign buying,” said First Capital Holdings Head of Research Dimantha Mathew.

“The market is slow as investors are waiting to see the direction.”

Mathew said investors are waiting to see the clarity on taxes following the Inland Revenue Bill and also waiting to see the outcome of the US Fed rate announcement. The bill, Sri Lanka’s major tax reform since independence from Britain in 1948, seeks to expand the tax net and stamp out evasion. It was presented in parliament on September 7. Turnover stood at Rs.627.6 million, less than this year’s daily average of around Rs.860.9 million.