COLOMBO Oct 3 Sri Lankan shares edged up on
Monday, hitting their highest in five weeks, led by blue chips
as hopes of some improvement in macroeconomic fundamentals
boosted investor sentiment, dealers said.
Sri Lankan shares were headed for a fifth straight session
of gains, with the benchmark Colombo stock index rising
0.41 percent to 6,561.74 as of 0642 GMT. The index touched its
highest intraday level since Aug. 26.
"The fiscal side seems to be really good," said Danushka
Samarasinghe, an economist and research head at Softlogic
Stockbrokers. He added that hopes of future interest rate cuts
on the back of easing consumer prices have been helping the
Sri Lanka's consumer prices rose 3.9 percent in September
from a year earlier, at a slightly slower place than the
previous month's 4.0 percent, data from the Department of Census
and Statistics showed on Friday.
Stock brokers said the market believed that the central
bank's tightening measures have started to bite. Central bank
chief Indrajith Coomaraswamy's positive comments published over
the weekend in local newspapers also helped boost the sentiment,
The central bank's decision last week to hold key monetary
policy rates steady, after tightening policy three times since
December, suggested that policy makers were keen to support a
slowing economy, analysts said.
Sri Lanka targets to cut its budget deficit to 4.7 percent
of gross domestic product (GDP) in 2017 from 5.4 percent this
year, Finance Minister Ravi Karunanayake told the International
Monetary Fund last month.
Shares in conglomerate John Keells Holdings and top
lender Commercial Bank of Ceylon were up 1.6 percent
and 0.56 percent respectively.
Turnover was at 343.4 million rupees ($2.46 million).
The spot rupee edged up and was at 146.75/80 per
dollar at 0650, compared with Friday's close of 146.85/146.95.
"Dollar sales by exporters helped ease the downward pressure
today. But the outlook remains the same and the seasonal
importer demand could pressurise the currency to fall," a
currency dealer said asking not to be named.
The central bank is under pressure from the IMF to continue
rebuilding international reserves and maintain exchange rate
flexibility to develop the foreign exchange market further.
($1 = 146.6500 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Amrutha Gayathri)