Shares rise as Central Bank looks to alleviate default fears

REUTERS: Sri Lankan shares rose yesterday after two straight sessions of declines, boosted by consumer and industrial stocks, after the Central Bank governor sought to alleviate fears that the island nation could default on its debt servicing obligations.

The benchmark stock index ended 0.58 percent higher at 7,371.86.

Sri Lanka is committed to meeting its debt servicing obligations, Central Bank Governor W.D. Lakshman said, adding that the island nation is in talks with some foreign governments and multilateral institutions regarding its finances.

The country has been dogged by dwindling foreign reserves, a tumbling currency and rising debt levels over the last year, leading to increasing fears of a default.

Distilleries Company of Sri Lanka rose 5 percent, making it the top boost on the index, while conglomerate Vallibel One and Ceylinco Insurance added 7.5 percent and 6.1 percent, respectively. Trading volume on the CSE All Share Index slipped to 75.7 million from 134.4 million in the previous session. Foreign investors were net-sellers, offloading Rs.412.2 million worth of shares, according to exchange data.

Equity market turnover was Rs.2.62 billion, data showed.

The Sri Lankan rupee was last quoted at 193.5 against the U.S. dollar, as of 1111 GMT.