Reuters: Sri Lankan shares hit a near 10-week closing high on Friday as an imminent loan deal with the International Monetary Fund and government measures to fix the country's fiscal gap aided sentiment, dealers said.
Sri Lanka has requested the IMF for a loan to help weather a looming balance of payments crisis, while an increase in the value added tax (VAT) to 15 percent from the current 11 percent is expected to help curb the budget deficit.
The country's central bank chief also said on Tuesday that it will stop excess government borrowing in a bid to get out of a debt trap.
The benchmark stock index ended 0.76 percent higher, or 48.12 points, at 6,401.32, its highest close since Feb. 8, after stock markets reopened Friday from a two-day break for the Sinhala-Tamil New Year.
"The positive trend is continuing with the government implementing revenue measures and finalising the IMF loan, which are seen as positive," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
However, higher interest rates and lower March-quarter earnings could impact stocks in the short term, he added.
Sri Lanka's bourse will reimpose a 0.3 percent share transaction levy it stopped in January, an exchange official said on Tuesday, after a proposal to tax capital gains met strong opposition amid foreign investor outflow from the stock market.
The move will help boost investor sentiment, analysts said.
The index moved further into overbought territory on Friday for the second time since Aug. 19 after being in neutral territory since March 11 through April 12.
The 14-day relative strength index ended at 74.472 on Friday, compared with Tuesday's 71.758, Reuters data showed.
A level between 70 and 30 indicates the market is neutral.
Turnover stood at 719.3 million rupees ($4.98 million), just below this year's daily average of 789.5 million rupees.
Foreign investors bought a net 158.5 million rupees worth equities on Friday, but they have been net sellers of 3.09 billion rupees worth of shares so far this year.
Shares in Ceylon Tobacco Company Plc rose 3.46 percent, while Lanka ORIX Leasing Company Plc climbed 5.88 percent.
($1 = 144.5000 Sri Lankan rupees)
Sri Lanka has requested the IMF for a loan to help weather a looming balance of payments crisis, while an increase in the value added tax (VAT) to 15 percent from the current 11 percent is expected to help curb the budget deficit.
The country's central bank chief also said on Tuesday that it will stop excess government borrowing in a bid to get out of a debt trap.
The benchmark stock index ended 0.76 percent higher, or 48.12 points, at 6,401.32, its highest close since Feb. 8, after stock markets reopened Friday from a two-day break for the Sinhala-Tamil New Year.
"The positive trend is continuing with the government implementing revenue measures and finalising the IMF loan, which are seen as positive," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
However, higher interest rates and lower March-quarter earnings could impact stocks in the short term, he added.
Sri Lanka's bourse will reimpose a 0.3 percent share transaction levy it stopped in January, an exchange official said on Tuesday, after a proposal to tax capital gains met strong opposition amid foreign investor outflow from the stock market.
The move will help boost investor sentiment, analysts said.
The index moved further into overbought territory on Friday for the second time since Aug. 19 after being in neutral territory since March 11 through April 12.
The 14-day relative strength index ended at 74.472 on Friday, compared with Tuesday's 71.758, Reuters data showed.
A level between 70 and 30 indicates the market is neutral.
Turnover stood at 719.3 million rupees ($4.98 million), just below this year's daily average of 789.5 million rupees.
Foreign investors bought a net 158.5 million rupees worth equities on Friday, but they have been net sellers of 3.09 billion rupees worth of shares so far this year.
Shares in Ceylon Tobacco Company Plc rose 3.46 percent, while Lanka ORIX Leasing Company Plc climbed 5.88 percent.
($1 = 144.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)
