Shares rise to over 6-week high on banks

Shares rose to over six-week high on Friday, despite foreign outflow from risky assets, as investors picked up shares of finance companies on expectations of better earnings, with positive sentiment continuing due to lower interest rates.
The main stock index ended 0.22% or 15.39 points firmer at 7,129.78, its highest close since 10 March. It has, gained 3.31% since the Central Bank cut key rates on 15 April, while yields on t-bills have fallen 26-36 basis points since then.
“There is lot of interest in finance companies, especially on the micro financing with low interest rates,” a stockbroker said on condition of anonymity. “Still people are not sure of the elections.”
Some analysts said the markets would stay volatile until Parliamentary elections are announced.
The market saw a net foreign outflow for the third straight session on Friday.
They have been net sellers of Rs. 35.1 million worth shares on Friday extending the net foreign outflow for the past three sessions to Rs. 168.8 million. But foreign buying stood at Rs. 3.63 billion so far this year.
Turnover was Rs. 615.4 million, compared with this year’s daily average of around Rs. 1.08 billion.
Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the Parliamentary elections.
Shares of Commercial Credit and Finance Plc rose 13.01%, while leading fixed-line telephone operator Sri Lanka Telecom Plc advanced 1.28%.
The index lost 6.6% last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.
Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe’s party does not have a majority in Parliament and President Maithripala Sirisena promised to dissolve the Parliament after the end of his 100-day program on 23 April.