Wednesday 30 December 2015

Sri Lankan shares rise to one-week high ahead of cenbank rate decision

Reuters: Sri Lankan shares ended firmer at more than one-week high on Wednesday, led by financials, but trading was this ahead of the central bank's key monetary policy rate decision later in the day.

The main stock index rose 0.33 percent to finish 6,870.63, its highest close since Dec. 21.

"The market is waiting for clear direction on the interest rates and many investors are still on holiday," a stockbroker said asking not to be named.

Sri Lanka's central bank is expected to raise interest rates by 25 basis points from record lows at its December policy meeting on Wednesday, a Reuters poll found, a move that could relieve pressure on the fragile rupee. The central bank's policy decision is due at 1400 GMT.

Stockbrokers expect some investors to shift to fixed and risk free assets from stocks in the event of a rate hike.

Foreign investors sold a net 31.6 million rupees ($219,292) worth of equities, extending the net outflow to 4.45 billion rupees so far in the year.

Turnover stood at 271.2 million rupees, around a quarter of this year's daily average of 1.06 billion rupees.

Commercial Leasing and Finance Plc rose 5 percent, while Lanka Orix Leasing Co Plc gained 2.5 percent.

Top lender Commercial Bank of Ceylon, which saw net selling by foreign investors, ended flat, but accounted for around a third of the day's turnover. 

($1 = 144.1000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Anand Basu)

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