Sri Lankan shares gain to over 6-month high on stability hopes

Colombo stock market

Sri Lankan shares jumped to their highest in more than six months on Wednesday on hopes of political stability after the Aug. 17 parliamentary elections and better earnings in the April-June quarter, brokers said.

The main stock index was up 0.79 percent at 7,367.72 by 0648 GMT, its highest level since Jan. 30, Thomson Reuters data showed.

“June-quarter earnings have been good so far and investors expect better earnings to continue,” said Prashan Fernando, CEO at Acuity Stockbrokers. “We expect the index to be volatile with profit-taking here and there until Aug. 17 election.”

The index had gained 6 percent in nearly a month through Monday as investors picked up risky assets on expectations of strong corporate earnings and political stability after the election in which political analysts see the current ruling party having an edge over the opposition coalition.

Turnover stood at 1.3 billion rupees ($9.74 million) in early trade on Wednesday.

The Sri Lankan rupee was steady at 133.50 per dollar despite importer dollar demand. A state-owned bank kept its dollar-selling rate at 133.50.

On Monday the state-run bank cut the currency’s peg against the dollar by 10 cents to allow the exchange rate to appreciate.

($1 = 133.5000 Sri Lankan rupees)