Shares extend gains on foreign inflows

REUTERS: Sri Lankan shares ended at their highest level in over a year as foreign investors continued to buy blue chips after an annual trade concession worth US $300 million from the European Union (EU) added fuel to a rally that started towards the end of March.
Index heavyweight John Keells Holdings Plc ended almost one percent higher on foreign buying. The benchmark index has risen nearly 11 percent since March 31.
The EU on Tuesday said Sri Lanka has regained a lucrative trade concession, mainly for its top exports garments.
The Colombo stock index ended 0.39 percent firmer at 6,718.34, its highest close since Jan. 8, 2016.
Turnover stood at Rs.1.75 billion well above this year’s daily average of Rs.899.5 million.
“Foreign interest is continuing in blue chips,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.
Foreign investors net bought shares worth Rs.902.6 million, extending the year-to-date net foreign inflows to Rs.18 billion.
Reduction of 11-38 basis points in T-bill yields in the last four weeks, stable currency on expectation of inflows from foreign borrowing, and an IMF statement on the disbursement of the third tranche of a US $1.5 billion loan, have helped boost sentiment, analysts said.
Shares in Ceylon Cold Stores PLC rose 4.4 percent while Ceylon Tobacco Company Plc rose 1.4 percent and John Keells Holdings Plc gained 0.9 percent.