Wednesday, January 13, 2010


By Shihar Aneez

COLOMBO, Jan 13 (Reuters) - Sri Lankan shares .CSE gained 1.2 percent on Wednesday to a record closing high, led by heavy buying in tourism and trading shares.
The All-Share Price Index .CSE of the Colombo Stock Exchange closed 42.09 points to 3536.71, surpassing its previous record close on Jan. 5. It hit an all-time high of 3549.27 points on Monday.
The hotels and tourism index .CSEHT hit a record high on booming tourist arrivals, while speculative trading in Environmental Resources GREG.CM, which announced rights and warrant issues, boost the trading sector .CSETR to an all-time high.
"Investors are bullish on rapid economic growth after the election," an analyst said on condition of anonymity.
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.
Investors and the business community met Rajapaksa on Friday and Fonseka on Tuesday. Both candidates have pledged to revive the war-hit economy.
Three analysts said investors were impressed on the opposition candidate's economic policies, which include tax cuts, elimination of corruption and bureaucracy, and an enabling investment environment.
For Sri Lanka's political risks, see [ID:nSGE5BE023]
The bourse has risen 4.2 percent so far in 2010 after being one of the world's best performing markets in 2009, jumping 125.2 percent on post-war optimism. It outpaced the benchmark emerging market equities index .MSCIEF, which rose 74.8 percent in 2009.
Analysts have said the bourse has already overheated as local investors do not have any alternatives due to prevailing low interest rates, while foreigners have been selling their stakes.

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