The Sunday Leader

Instability boosts market

A foreign fund bought 4.4 million shares of J.K.H. at Rs. 154 a share on local selling at Friday’s trading, with foreigners looking at blue chip stocks such as J.K.H., H.N.B., N.D.B. and Commercial Bank after doing their homework with the war end, market sources told The Sunday Leader.

The market is now on a roll, further boosted by local institutional and high networth sentiment that the Government is not stable, with speculation that there would be crossovers to the opposition, they said.

Local market sentiment is weighted heavily in favour towards a government led by the capitalist U.N.P. party.

Sources said that the war end has caused foreign investor sentiment to look at the local market once again in a positive light.  “After the war end they made inquiries, came down and saw the ground situation for themselves, did their homework and now they are translating those inquiries into actual transactions,” the sources further said.

S.L.T. and Dialog, though high on market capitalization, are poor on earnings currently, those stocks at the moment don’t excite foreigners, they said. What they are looking at are the blue chips in the diversified and banking sectors, the sources said.

Foreigners know that Sri Lanka is a democratic institution. As such who wins the January 26 elections don’t matter to them, though local sentiment may be different, the sources said. As such whoever comes to power, the market will still be on a roll, they said. The war end is the change denominator.

Meanwhile in what appeared to be a transfer, some 1.2 million shares of Distilleries was sold by a local at Rs. 95 a share to a foreign buyer at Friday’s trading.

1 Comment for “Instability boosts market”

  1. How come JKH shares are doing well, even after their chairman Susantha Ratnayake was involved with a crooked deal involving the then finance secretary Jayasundera in the biggest crooked deal .The court decalred the deal null and void and had a very strong note to state about the nature of the irregular deal.
    How Susantha is still there as the chairman of JKH.???
    I thought he would have resigned at least by now, if he was not removed and probably charged?

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