Jan 13, 2017 (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.