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Sri Lanka bourse hits new record; rupee firmer

[Reuters, Tuesday, 5 January 2010 17:27 No Comment]

Sri Lankan shares .CSE on Tuesday rose for the second consecutive day to hit a new record high on strong turnover.

The rupee currency LKR= closed firmer after the central bank lowered dollar buying rates in line with weakening of dollar globally.

The All-Share Price Index .CSE of the Colombo Stock Exchange rose 1.55 percent to 3,535.81 points by midday, surpassing its previous peak of 3,490.56 hit on Jan. 4.

It closed 38.30 points or 1.1 percent firmer at a record closing high of 3,519.94.

"The market is up with healthy turnover on across the board buying," said Asmath Iqbal, an investment analyst at John Keells Stockbrokers in Colombo.

"Investors are getting into positions ahead of elections regardless of who will win, thinking foreign investors who are sidelined will be back after the elections."

Sri Lanka is set for presidential elections on Jan. 26 with incumbent Mahinda Rajapaksa facing a challenge from his former army chief Sarath Fonseka, who oversaw the defeat of separatist Tamil Tiger rebels. Twenty other candidates are vying.

Sri Lanka’s stock exchange was one of the world’s best performing markets in 2009, jumping 125.2 percent on optimism that the end of the country’s long civil war in May would bring in a flood of badly needed foreign investment.

It has outpaced the benchmark emerging market equities index .MSCIEF, which rose 74.8 percent in 2009.

Low interest rates and slowing inflation have also fuelled foreign investor interest.

Shares in Distillers Sri Lanka DIST.CM rose 4.34 percent to 114 rupees a share, while market heavyweight and top conglomerate John Keells Holdings JKH.CM rose 0.56 to a near 3-year high of 180 rupees.

The day’s turnover was 1.54 billion rupees ($13.4 million), almost triple the 2009 daily average of 593.6 million rupees.

For Sri Lanka’s political risks, see [ID:nSGE5BE023]

The Sri Lankan rupee LKR= closed firmer at 114.30/35 per dollar, compared with Monday’s close of 114.45/50.

Currency dealers said that state banks which the central bank uses to direct the market lowered dollar buying rates in line with weakening of dollar against other currencies.

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