Sri Lanka stocks edge up after policy rate decision

(Reuters) - Sri Lankan stocks rose for the sixth straight session on Tuesday to touch their highest in more than three years after the central bank effectively reduced its standing deposit facility rate to boost credit and economic growth.

Before the market opened, the central bank announced moves to make commercial banks lower their interest rates and increase lending to support an economy expected to grow 7.8 percent this year, while keeping its own policy lending rate unchanged.

The main stock index ended up 0.06 percent, or 4.23 points, at 7,260.64, its highest closing level since June 9, 2011.

"We expect a surge in activity due to declining interest rates," said Hussain Gani, deputy CEO at Softlogic Stockbrokers said. "I think there will be demand for fundamentally sound shares and we see an increase in buying using margin credit."

Stockbrokers said they expect the index to gain further, fuelled by the indirect rate cut.

The central bank also cut its year-end inflation projection to 3-4 percent from 4-5 percent due to a cut in energy prices on Sept. 16.

Sri Lanka is aiming for a higher economic growth of 8.2 percent and a lower fiscal deficit target of 4.4 percent of gross domestic product next year, a government document showed last week.

The stock index has gained 22.8 percent so far this year.

The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, rose to 85.616 on Tuesday compared with Monday's 84.729, Thomson Reuters data showed.

Shares of Commercial Leasing and Finance Plc, which led the overall gains, rose 4.35 percent to 4.80 rupees, while Bukit Darah Plc gained 3.54 percent to 735.1 rupees.

Sri Lanka Telecom Plc added 1.92 percent to close at 53.20 rupees.

The day's turnover was 2.18 billion rupees ($16.7 million), well above this year's daily average of over 1.28 billion rupees.

Foreign investors were net sellers for the fist time in six sessions. They sold 305.33 million rupees worth of shares on Tuesday, but have been net buyers of 11.24 billion rupees in shares so far this year. 

($1 = 130.2800 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka stocks close higher

Sep 23, 2014 (LBO) - Sri Lanka's stocks closed 0.06 percent higher with telco and palm oil stocks gaining amid net foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 4.23 points higher at 7,260.64, up 0.06 percent. The S&P SL20 closed 0.78 points lower at 4,030.09, down 0.02 percent.

Turnover was 2.18 billion rupees, up from 1.94 billion rupees a day earlier with 102 stocks closed positive against 102 negative.

John Keells Holdings closed 20 cents lower at 253.90 rupees with three off-market transactions of 440.09 million rupees contributing 20 percent of the turnover.

JKH’s W0022 warrants closed 70 cents lower at 74.30 rupees and its W0023 warrants closed 1.90 rupees higher at 79.00 rupees.

The aggregate value of all off-the-floor deals represented 34 percent of the daily turnover.

First Capital Holdings closed 1.20 rupees higher at 46.60 rupees and Softlogic Holdings closed 40 cents higher at 16.50 rupees, attracting most number of trades during the day.

Foreign investors bought 561.09 million rupees worth shares while selling 866.41 million rupees worth shares.

Bukit Darah closed 25.10 rupees higher at 735.10 rupees and Sri Lanka Telecom closed 1.00 rupee higher at 53.20 rupees, contributing most to the index gain.

Commercial Leasing and Finance closed 20 cents higher at 4.80 rupees and Ceylon Tobacco Company closed 15.00 rupees lower at 1,155.00 rupees.

The SEC has decided to lift the price constraints imposed on the crossings board for share transactions falling within the ambit of the Central Bank’s Financial Sector Consolidation Plan.

This will be effective from 22 September 2014.