Home » News

Banks, John Keells propel Sri Lanka bourse

[Reuters, Friday, 26 March 2010 13:41 No Comment]

Sri Lanka’s shares rose on Friday for a second straight session, led by the banking sector .CSEBF and heavy buying of John Keells Holdings JKH.CM, a favorite of foreign investors.

The All-Share Price Index .CSE of the Colombo Stock Exchange closed 1.16 percent or 43.33 points firmer at 3,773.76, recouping some of the losses it made during an eight-day fall that ended on Thursday. It had hit a record high on March 15.

"The market continued to move up with interest on JKH and the banking sector," said Asmath Iqbal, an investment advisor with John Keells stockbrokers in Colombo.

The banks, finance and insurance sector .CSEBF index rose 1.28 percent after an unidentified state institution for a second day bought up bank shares.

Shares in Sampath Bank SAMP.CM closed 4.8 percent firmer at 227.75 rupees a share, while Hatton National Bank HNB.CM closed 1.9 percent firmer at 183.75 rupees a share.

Shares in conglomerate John Keells Holdings JKH.CM jumped 4.5 percent to 186 rupees a share.

Foreign investors were net sellers of 380.4 million rupees worth of shares, data showed. They have been net sellers in 44 out of the 56 trading sessions so far this year, selling a net of 13.2 billion rupees’ worth of shares.

The bourse is up 11.5 percent so far this year.

The market shot up 125 percent in 2009, coming off of a low base and spurred by the end of a 25-year war in May, which enticed foreign investors to cash in shares. Foreign investors had been net buyers since 2001.

The day’s turnover was 1.1 billion rupees ($9.6 million), well above the 2009 daily average of 593.6 million rupees, mainly due to foreign selling.

Analysts say concerns over economic stability amid an eight-year high budget deficit in 2009 and a delay of the third tranche of a $2.6 billion loan by the International Monetary Fund may be prompting overseas investors to leave.

After the markets closed, government data showed the economy grew 3.5 percent in 2009, down from a 6.0 percent expansion in 2008 to a multi-year low. [ID:nCMB000042]

Sri Lanka holds parliamentary polls on April 8. For Sri Lanka’s key political risks, see [ID:nRISKLK]

The benchmark 91-day treasury bill yield hit an over four-month high of 8.45 percent on Wednesday at a weekly auction and it has risen 1.3 percentage points since Dec. 2.

The rupee LKR= closed slightly changed at 114.07/10 from Thursday’s close of 114.05/10 per dollar, dealers said, They said they expect upward pressure on the rupee as foreign investors cash out their investments and seek dollars.

Stock and foreign exchange markets will be closed on Monday to mark a Buddhist religious holiday. Trading resumes on Tuesday.

[Full Coverage]

(For updates you can share with your friends, follow TNN on Facebook, Twitter and Google+)

Comments are closed.