Sri Lankan stocks near 3-yr closing high on large caps, low rates

Aug 7 (Reuters) - Sri Lankan stocks gained more than 1 percent on Thursday, hovering near a three-year closing high, led by large caps as indications of a cut in key policy rates by the central bank governor helped investors shift to riskier assets.

The main stock index gained 1.1 percent, or 74.92 points to 6,908.18, its highest close since September 14, 2011, boosting market capitalisation by 31.44 billion rupees ($241.53 million). It has risen 16.8 percent so far this year.

"Buying by foreign investors in John Keells Holdings pushed up foreign inflows and turnover," said Reshan Wediwardana, research analyst at First Capital Equities (pvt) Ltd.

Stockbrokers said investors had "no option" but to buy into stocks due to low interest rates as the market is expecting another rate cut during the Aug. 15 policy rate announcement.

Central bank chief Ajith Nivard Cabraal said on Thursday there was a greater chance of a cut, rather than a hike, in key policy rates, a day after yields on one-year government debt fell to 6.45 percent, below the rate of 6.50 percent at which the central bank mops up liquidity from commercial banks.

Hopes over strong earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $22 billion-worth stock market.

Shares in Keells ended 0.84 percent firmer at 238 rupees, while large cap shares like Ceylon Tobacco Company and Carson Cumberbatch helped boost the main index with 2.54 percent and 2.17 percent gains, respectively.

Turnover was 2.24 billion rupees ($17.21 million), more than double this year's daily average of about 1.01 billion rupees.

Foreign investors bought a net 424.6 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 11.68 billion rupees.

The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets such as shares because of low interest rates and foreign buying.

(1 US dollar = 130.1700 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka stocks close up 1.1-pct

Aug 07, 2014 (LBO) - Sri Lanka's stocks closed 1.10 percent higher recording over two billion rupees in turnover with tobacco stocks gaining amid strong foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 74.92 points higher at 6,908.18, up 1.10 percent. The S&P SL20 closed 37.24 points higher at 3,790.03, up 0.99 percent.

Turnover was 2.24 billion rupees, up from 1.40 billion rupees a day earlier with 146 stocks closed positive against 69 negative.

Chevron Lubricants Lanka closed 2.50 rupees higher at 314.00 rupees with an off-market transaction of 62.04 million rupees changing hands at 310.20 rupees per share contributing 3 percent of the daily turnover.

The aggregate value of all off-the-floor deals represented 7 percent of the turnover.

John Keells Holdings closed 2.00 rupees higher at 240.00 rupees with market transactions of 504.83 million rupees contributing 23 percent of the turnover.

JKH’s W0022 warrants closed 20 cents higher at 72.00 rupees and its W0023 warrants closed 1.00 rupee higher at 79.00 rupees.

Central Investments and Finance closed 40 cents higher at 2.60 rupees, attracting most number of trades during the day.

Foreign investors bought 737.17 million rupees worth shares while selling 312.60 million rupees worth shares.

Ceylon Tobacco Company closed 28.70 rupees higher at 1,159.30 rupees, contributing most to the index gain.

Carson Cumberbatch closed 10.00 rupees higher at 470.00 rupees and Lion Brewery Ceylon closed 16.20 rupees higher at 623.80 rupees.

Sri Lankan stocks at near 3-yr closing high on low rates

Aug 6 (Reuters) - Sri Lankan stocks touched a near three-year closing high on Wednesday led by banks on hopes the ongoing financial sector consolidation would help boost future earnings amid low interest rates; continued buying by foreign investors also helped sentiment.

The main stock index ended 0.26 percent, or 17.84 points, firmer at 6,833.26, its highest close since September 16, 2011. It rose 6.82 percent in July and has been up 15.57 percent so far in the year.

"Retail interest was mainly in the financial sector with mergers and acquisitions taking place due to the financial sector consolidation," said Dimantha Mathew, research manager at First Capital Equities (pvt) Ltd.

"There is an increasing interest on the demand side (for stocks) simply because people are searching for avenues to invest with interest rates coming down."

Yields in treasury bills fell 8-13 basis points at a weekly auction on Wednesday with the one-year T-bill yield falling below the central bank's repurchase rate or standing deposit facility rate.

Hopes over strong earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $22 billion-worth stock market.

Ceylinco Insurance Plc rose 1.54 percent to 1,360.70 rupees and Union Assurance Plc rose 10.32 percent to 174.20 rupees. Shares in the biggest listed lender Commercial Bank of Ceylon Plc rose 0.64 percent to 142.40 rupees.

Turnover was 1.39 billion rupees ($10.68 million), more than this year's daily average of about 1.01 billion rupees.

Foreign investors bought a net 223.3 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 11.26 billion rupees.

The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets because of low interest rates and foreign buying.

Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets. 

(1 US dollar = 130.1800 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)