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S.Lanka stocks at 5-week high on Keells, HNB

[Reuters, Thursday, 3 December 2009 19:17 No Comment]

Sri Lankan shares .CSE rose on Thursday to a five-week high, led by conglomerate John Keells Holdings JKH.CM and private lender Hatton National Bank HNB.CM.

The All-Share Price Index .CSE of the Colombo Stock Exchange rose 1.78 percent or 52.45 points to 3004.61, its fourth straight rise and highest close since Oct. 28.

Prior to the turnaround, the market had fallen 4.5 percent over seven straight sessions, as a presidential election on Jan. 26 unsettled investors.

"A low interest rate regime and expectations on high quarterly profits in the December quarter are driving the market," Hussain Gani, associate director at Asia Securities, told Reuters.

Other analysts said recent sales by U.S.-based fund Galleon Group and its founder, Raj Rajaratnam, of their holdings in HNB and Keells helped boost turnover to 2.6 billion rupees ($22.51 million), more than five times of last year’s daily average.

Rajaratnam has been charged in the largest U.S. insider trading case involving a hedge fund, and investors have been waiting to gauge the impact on the market. Rajaratnam is one of the biggest investors in the relatively small bourse.

Market heavyweight Keells rose 1.33 percent to 152.50 rupees, while Hatton National Bank gained 0.15 percent to 163.25 rupees.

Both Keells and HNB accounted for over 79 percent of the day’s turnover.

Analysts said investors are waiting to see the economic policies of the main presidential candidates Mahinda Rajapaksa and Sarath Fonseka.

General Fonseka, who led the army to victory over the Tamil Tigers, said on Sunday he will run for president, pitting himself against the man who also takes credit for ending the 25-year war with the separatist rebels. [ID:nSP351115]

Investor confidence in the island nation’s bourse, still one of 2009′s best performers worldwide with a 99.9 percent year-to-date return.

The Sri Lankan rupee LKR= closed flat at 114.15/25 per dollar. On Wednesday it rose 0.3 percent as the central bank lowered dollar trading price range.

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