Sri Lankan shares end at 2-wk high on proposed EU trade concession

FIRST CAPITAL’S HEAD OF RESEARCH, DIMANTHA MATHEW, SPEAKS TO REUTERS

Sri Lankan stocks ended at their highest level in two weeks on Friday, led by beverage and manufacturing shares, as sentiment improved after a European Union executive proposed that the bloc reinstates a trade concession to Sri Lanka.

The European Commission on Wednesday said in a statement that it has proposed increased market access or Generalised Scheme of Preferences Plus (GSP+) for Sri Lanka as a reform incentive. Markets were closed on Thursday on account of a religious holiday.

The Colombo stock index ended 0.54 percent firmer at 6,217.72, its highest close since Dec. 30.

“The regain of GSP plus boosted the market. Investors were positive over the news, but we wont think it will last long because of the rising market interest rates,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

The 6-7 percent concession earlier offered by the GSP Plus had brought substantial benefits to the garment industry, Sri Lanka’s second-biggest foreign exchange earner after remittances.

Sri Lanka lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush a Tamil insurgency.

The day’s turnover stood at 519.9 million rupees ($3.47 million).

Foreign investors were net buyers of 2.6 million rupees worth of equities on Friday, but they have been net sellers of 1.7 billion rupees worth of shares so far this year.

Shares in Sri Lanka Telecom Plc rose 2 percent while Carson Cumberbatch Plc rose 1.8 percent.

($1 = 149.6500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management,  retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory. 

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.