Sri Lanka,s Banks -latest Investment Attraction

 

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Sri Lankan shares edged lower, snapping a six-session gaining streak, from their six-month high due to retail profit taking, but foreign investors bought into banks on hopes of further easing of monetary policy.
The central bank on Tuesday kept key monetary policy rates unchanged for a fourth straight month as expected, but left the door open for easing later as inflation is expected to slow further.
The main stock index fell 0.16 percent, or 9.58 points, to 5,882.25, slipping from its highest close since Oct. 2, 2012.
“Retail profit taking brought the market down, but foreigners bought banks,” said a stockbroker.
An expected fall in interest rates has boosted sentiment, after Treasury Secretary P. B. Jayasundera said Sri Lanka’s interest rates should fall in May-June as the borrowing needs of loss-making state energy companies recede.
The index has gained 2.15 percent in the last six straight sessions through Thursday since the treasury secretary’s comments.
The turnover was at 1.03 billion rupees ($ 8.19 million) on Friday, higher than this year’s daily average of about 966 million rupees.
Foreign investors, who mainly bought banking shares, were net buyers of 490.6 million rupees worth of shares, extending the year-to-date net foreign inflow to 7.8 billion rupees.
Last year, the bourse saw a net inflow of $ 303 million.
The rupee edged down for a fourth straight session to 125.95/126.00 to the dollar, from Thursday’s close of 125.72/78, due to demand from importers for the greenback, currency dealers said.
The rupee has been on the rise since mid-March on inflows from remittances and exporter dollar sales ahead of the traditional new year which was celebrated on April 13 and April 14.(Reuters)

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