Stocks climb for 3rd session as Janashakthi Insurance jumps

REUTERS: Sri Lankan shares rose for a third straight session yesterday to their highest close in more than three weeks, boosted by a surge in Janashakthi Insurance Plc as it agreed to sell its general insurance unit to Germany’s Allianz SE.

Janashakthi stock jumped about 28 percent in the session, bringing its weekly gain to a whopping 73 percent.

The insurer said on Friday it agreed to sell its wholly owned subsidiary, Janashakthi General Insurance Ltd, for Rs.16.4 billion (US$106.4 million) to Allianz. The Colombo stock index ended up 0.34 percent at 6,520.46, its highest close since Jan. 9. The market rose 1 percent this week, its second straight weekly gain.

“A combination of retail, high-net-worth and foreign investors were active today,” said Dimantha Mathew, head of research at First Capital Holdings.

Cargills (Ceylon) Plc rose 5.7 percent, while Nestle Lanka Plc ended 2.4 percent up, and Ceylon Tobacco Company Plc rose 0.9 percent.
The market turnover was Rs.1.22 billion (US$7.9 million), more than last year’s daily average of Rs.915.3 million. Foreign investors sold a net Rs.3.8 million worth of shares yesterday, but they have been net buyers of Rs. 4.2 billion worth of equities so far this year. Analysts said the political uncertainty ahead of a local election next month continued to weigh on sentiment. Sri Lanka will hold a long-delayed local government election on Feb. 10.

President Maithripala Sirisena in an election rally over the weekend said he was ready to form a new government with his Sri Lanka Freedom Party (SLFP), breaking away from the current coalition - a comment that exacerbated worries about the future of the coalition government.
Sri Lanka’s stock, bond and foreign exchange markets are closed on Monday for a special holiday. Markets will resume trading on Tuesday.