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Sri Lanka shares at new record on post-poll buying

[Reuters, Monday, 1 February 2010 10:48 No Comment]

Sri Lankan shares hit a new record on Monday as retail investors bought shares in heavy trade, banking on post-election stability and economic recovery after President Mahinda Rajapaksa’s re-election on last week.

The All-Share Price Index of the Colombo Stock Exchange jumped 1.86 percent to touch a new record high of 3704.20 points, surpassing a previous all-time high of 3647.80 recorded on Thursday.

"The retailers are heavily buying the shares," said Prashan Fernando, executive director at Acuity Stockbrokers.

"They believe in political stability after last week’s poll, after the end of a 30-year war, would be enough for a boom in coming years."

Analysts and traders said despite the market booming, foreign investors have not yet bought share since the Jan. 26 poll.

Rajapaksa on Wednesday won an historic post-war election with a landslide victory, which climaxed with his rival, former army commander General Sarath Fonseka, crying foul over rigged votes.

Rajapaksa is expected to dissolve parliament shortly and call a legislative election, while the opposition has vowed to protest against vote rigging and what they say is harassment of their candidate.

Analysts on Monday said retail investors do not expect that the protests and other activities to hamper post-war economic growth, since Rajapaksa’s administration has successfully stopped them in the past.

Turnover exceeded 2 billion rupees ($5.23 million), more than 2009 daily average of 593.6 million rupees.

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