Tuesday, September 7, 2010

Sri Lanka shares up on Spence deal

 * Aitken Spence SPEN.CM gains 10 pct, drives market
 * Analysts say foreign investor sold Aitken Spence
 * Rupee down on importer dlr demand


COLOMBO, Sept 7 (Reuters) - Sri Lanka's benchmark share index rose on Tuesday led by a block trade in conglomerate Aitken Spence SPEN.CM that sent it up by the maximum 10percent allowed under market rules.

Sri Lanka's main share index .CSE closed 0.45 percent firmer at 5,884.99 points. It hit a record high of 5,925.38 points on Monday. The index is Asia's best performer in 2010 with a 73.8 percent gain.

Aitken Spence, which has interests from port-related businesses to leisure, rose 10 percent to 2,745.30 rupees after 900,000 shares traded at 2,700 rupees each. Three analysts said the seller was foreign and the buyer local.

The market has gained over 5.1 percent since the cabinet backed the amendments that would free President Mahinda Rajapaksa to run for a third term after his present one expires in 2017. [nSGE67T0AC] [nSGE6860BG]

Turnover was 5.9 billion rupees ($52.4 million), 10 times the 2009 average. Foreign investors sold a net 2.5 billion rupees' in shares and they have sold a net 14.5 billion rupees this year.

 The rupee LKR= closed weaker at 112.63/67 a dollar from Monday's 112.47/52 due to importer demand for dollars, dealers said amid yields in T-bills dropped sharply. [ID:nSGE686029]

 FACTORS TO WATCH:
  • Why foreign investors are selling despite post-war economic optimism
  • Whether there will be a drastic technical correction
  • Tax reforms promised by the government

source - www.reuters.com

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