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Sri Lanka shares flat on pre-poll political concerns

[Reuters, Wednesday, 9 December 2009 13:05 No Comment]

Sri Lankan shares closed flat on Wednesday, as cautious investors bought stocks amid weak sentiment due to concerns over political stability ahead of a presidential poll due next month.

The All-Share Price Index .CSE of the Colombo Stock Exchange hardly changed with gaining 0.06 points to 3052.74, its highest close since Oct. 23.

"Most of the investors do not want to take critical investment decisions ahead of elections," Prashan Fernando, executive director at Acuity Stockbrokers, told Reuters. "The market is also slow due to the upcoming festive season."

Other analysts said defections by politicians between two main parties have created more uncertainty ahead of the Jan. 26 presidential poll, which was earlier expected to be won by the incumbent president easily.

However, analysts said the market should pick up soon after the poll as the market fundamentals are still strong with low interest rates and better corporate profits led by post-war economic optimism.

The presidential poll will be followed by parliamentary election due by April.

Conglomerate Carson Cumberbatch CARS.CM closed 1.67 percent firmer at 349.75 rupees a share.

Market heavyweight John Keells Holdings JKH.CM lost 0.8 percent to 155 rupees a share, while private lender Hatton National Bank HNB.CM fell 2.22 percent to 165 rupees.

Both of them accounted for around half of the day’s turnover of 715.7 million rupees ($6.3 million). Last year’s daily average was 464 million rupees.

Analysts said investors were waiting to see the economic policies of the main presidential candidates Mahinda Rajapaksa and Sarath Fonseka, who square off at the polls on Jan. 26.

The island nation’s bourse remains one of 2009′s best performers worldwide with a 103.1 percent year-to-date return.

The Sri Lankan rupee LKR= closed flat at 114.20/25 per dollar.

The benchmark 91-day treasury bill yield rose by 11 basis points to 7.51 percent at a weekly auction on Wednesday. [ID:nCOL65657]

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