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Sri Lanka bourse at 9 month high on foreign interest

Posted on: June 14, 2009

Reuters – Saturday, June 13

* Market sees net foreign inflow of 40.7 million rupees

* Bourse at 9-mo high with significant turnover

* Cbank’s IMF loan comments move bourse – brokers

* Bluechips, plantation and hotel shares push market

By Shihar Aneez

COLOMBO, June 12 – Sri Lankan shares <.CSE> jumped on Friday to a nine-month high led by foreign buying of bluechips after the central bank said an IMF loan will be approved before end-June and local purchases of plantation and hotel shares.

The rupee <LKR=> closed flat as a state bank bought dollars.

The Colombo All-Share Price Index rose 1.55 percent or 34.51 points to 2220.11, its highest close since Sept. 17 last year.

“The market was very active, mainly after positive news on IMF loan,” said Geeth Balasuriya, head of research at Acuity Stockbrokers. “There was also interest on plantation shares on high oil and tea prices and hotel shares on tourism boom hopes.”

The central bank on Wednesday said Sri Lanka’s request for a $1.9 billion International Monetary Fund loan is expected to be approved by the end of June. [ID:nCOL430797]

Analysts said foreign funds have been slow to come to the market, which has been driven higher by retail buyers on positive sentiments since the war ended on May 18.

Net foreign inflows had been 1.4 billion rupees before the end of war, have turned to a net outflow of 218 million rupees on Friday despite a 40.7 million rupees inflow, officials said. ————————————————————

For Q+A on post-war foreign share buying see [ID:nCOL8675] ———————————————————— High oil prices, which go along with synthetic rubber price and high tea prices pushed up plantation shares, analysts said.

Oil eased to $72 a barrel, still at a near eight-month high on Friday. [ID:nLC158279]

Sri Lanka’s average total tea price has jumped around 22 percent to 342 rupees in May from January on high global demand.

The bourse has risen 18.2 percent since the government declared victory in a 25-year war on May 18 and is up 50 percent so far this year on war-end hopes and optimism.

Shares in Distilleries Company of Sri Lanka <DIST.CM>, which plummeted last week on a court ruling, gained 6.23 percent to 81 rupees, calculated on a weighted average. [ID:nCOL387319]

Top conglomerate John Keells Holdings <JKH.CM> rose 1.09 percent to 116.25 rupees, while development lender National Development Bank <NDB.CM> gained 3.5 percent to 125.75 rupees.

Kotagala Plantation <KOTA.CM> jumped rose 9.7 percent to 28.25 rupees and the plantation sub-sector index <.CSEPL> gained around 6 percent on Friday.

In hotel sector, Asian Hotel Properties <AHPL.CM> rose 2.91 percent to 44.25 rupees and Confifi Hotel <PALM.CM> closed 5.6 percent firmer at 104 rupees.

The turnover was 646.6 billion rupees , more than last year’s daily average of 464 million rupees.

The rupee closed flat at 114.90/95 a dollar as a state bank bought dollars at a flat rate of 114.90 rupees, dealers said.

The rupee hit a record low of 120.80/121.10 on April 23, as the central bank stopped preventing depreciation amid discussions on the IMF loan.

The interbank lending rate or call money rate <CLIBOR> edged down to 10.050 percent from Wednesday’s 10.070 percent.


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