Shares end at 7-month high on stability hopes after polls

Sri Lankan shares closed at t heir highest level in seven months in a truncated session yesterday on hopes that political stability after the August 17 parliamentary elections would help boost investor sentiment, brokers said.

Sri Lankans went to the polls yesterday to elect a new parliament in what amounts to a referendum on ex-President Mahinda Rajapaksa’s comeback bid, with t he reformist alliance that swept him from power seeking a stronger mandate.

The trading time was reduced to half from the usual five hours due to the election.

The main stock index ended up 0.4 percent at 7,492.04, the highest close since January 16.

The day’s turnover stood at Rs.1.17 billion yesterday, in line with this year’s daily average of Rs.1.13 billion.

Foreign investors were net buyers of a net Rs.4.79 million worth of equities yesterday. But they have offloaded a net Rs.1.08 billion worth of shares so far this year.

“Heavy retail interest was there. The whole market was dominated by retail investors on the hopes of strong earnings and a stable government after the elections,” said First Capital Equities (Pvt.) Ltd Research Manager Dimantha Mathew.

“We expect the market to be very positive after the elections.”

Shares in Sri Lanka Telecom PLC jumped 3.59 percent, while Ceylon Theaters PLC rose 7.80 percent, pushing the index higher.

REUTERS