Shares end at over 1-week high on hopes of political stability

REUTERS: Sri Lankan shares hit a more than one-week high yesterday, surpassing the 7,000-point psychological barrier as hopes of political stability after the August 17 election helped boost sentiment, stockbrokers said.

The ruling United National Party (UNP) has formed a coalition with some other parties to contest the election. Political analysts see the new coalition could increase the ruling party’s chances of winning the election.

“The market will be positive after seeing some kind of clarity and on hopes that there can be a stable government after the elections,” said Dimantha Mathew, a Research Manager at First Capital Equities (Pvt.) Ltd. The main stock index ended up 0.27 percent, or 18.66 points, at 7,002.78, rising for a third session and its highest since July 3.

The index crossed a key barrier of 7,000 points, dealers said.

The day’s turnover stood at Rs.531 million, just about half of this year’s daily average of Rs.1.05 billion.

The market saw net foreign outflows of Rs.26.5 million yesterday, extending net outflows for the past 33 sessions to Rs.5.68 billion. Shares in top fixed-line phone operator Sri Lanka Telecom PLC rose 1.58 percent, while Cargills (Ceylon) PLC rose 6.95 percent, pushing up the overall index. Mobile phone operator Dialog Axiata PLC rose 1.94 percent. President Maithripala Sirisena dissolved parliament on June 26 and scheduled elections for August 17, in an effort to consolidate power and push through political reforms.