September 4, 2018 / 11:28 AM / a month ago

Sri Lankan shares hit over 3-week closing high in lean trade

COLOMBO, Sept 4 (Reuters) - Sri Lankan shares rose for a fifth straight session on Tuesday and marked their highest close in more than three weeks, led by gains in banking and beverage stocks.

However, trading volume was low as investors stayed on the sidelines for want of fresh triggers. The day’s turnover stood at 181.9 million Sri Lankan rupees ($1.12 million), the lowest since August 3 and less than a fifth of this year’s daily average.

The Colombo stock index ended 0.6 percent higher at 6,128, its highest close since Aug.13. It had gained 0.4 percent last week, its second straight weekly gain.

The index, however, was down 1.1 percent in August, having hit its lowest close since March 2017 on last Tuesday. The bourse is down 3.8 percent so far this year.

“Most investors are awaiting proper direction on economy and taxes,” said Dimantha Mathew, head of research at broker First Capital Holdings.

“The main concern is that foreign selling is still continuing and we don’t think this uptrend can continue for long.”

Foreign investors sold a net 31.3 million rupees of shares on Tuesday, extending their net outflow so far this year to 4.2 billion rupees worth of shares.

AIA Insurance Lanka Plc jumped 82 percent, with around 1,700 shares changing hand, due to a share buyback, dealers said.

Ceylon Tobacco Company Plc shares closed 2.5 percent firmer while Dialog Axiata Plc gained 0.8 percent and Hemas Holdings Plc ended 0.5 percent higher.

Sri Lankan companies posted an average 4 percent earnings growth in the June quarter from a year earlier, helped by financials, beverages, telecommunications and power and energy sectors, CT CLSA Securities (PVT) Ltd said in a research note.

$1 = 161.8500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan

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