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Sri Lanka bourse slips from record highs; rupee flat

[Reuters, Wednesday, 6 January 2010 23:48 No Comment]

Sri Lankan shares .CSE seesawed on Wednesday in high turnover before slipping as retail investors booked profits after the bourse hit an all-time high in intraday trading.

The All-Share Price Index .CSE of the Colombo Stock Exchange rose 0.72 percent to 3,545.56 points by midday, surpassing its previous peak of 3,535.81 hit on Tuesday.

It closed 10.58 points or 0.3 percent down to 3,509.36, off its record close of 3,519.94 on Tuesday.

"The index slipped on heavy turnover levels, ad we saw a little bit of retail profit-taking," said Prasanna Chandrasekera, assistant manager at Asia Securities in Colombo.

Conglomerate John Keells Holdings JKH.CM accounted for more than 80 percent of the day’s turnover of 5.99 billion rupees ($52.4 million), almost 10 times the 2009 daily average of 593.6 million rupees.

Shares in John Keells closed 0.28 percent weaker at 179.50 rupees a share, while top fixed-line telephone operator Sri Lanka Telecom SLTL.CM closed 1.70 percent weaker at 43.25 rupees.

Chandraskera said a foreign investor had sold 4.8 billion worth of shares to another foreign fund.

"It was a good signal to the market that there are foreign buying even before the elections," he said.

Analysts say investors were getting into positions ahead of elections regardless of the outcome, 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 the separatist Tamil Tiger rebels.

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.

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

The Sri Lankan rupee LKR= closed flat at 114.30/33 per dollar, compared with Tuesday’s close 114.30/35.

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