Shares at 3-wk high despite foreign selling

(Reuters) - Sri Lanka's stock market rose 0.9 percent on Thursday to a more-than-three-week high on bargain hunting amid high volume of foreign selling, while the rupee closed up on dollar buying for stocks-related transactions.

The island's main share index <.CSE> rose 55.69 points to 6,511.51, its highest since Dec. 3. Asia's best performer in 2010 has risen 92.3 percent, ahead of second-ranked Indonesia's 42.5 percent.

It has fallen 9.7 percent since hitting a record high on Oct. 4, mainly on a liquidity shortage, and has slowed down with year-end settlements and the impending holidays. The day's turnover was 2.2 billion rupees ($20.2 million) -- around four times the 2009 daily average of 593.6 million rupees.

Foreign investors have sold a net 25.6 billion rupees in shares this year, and on Thursday they sold a net 711 million rupees.

The bourse is trading at a forward price-to-earnings ratio of 19.1, the highest in Asia and global emerging markets, compared with all-Asia's 13.3 and global emerging markets' 12.2, Thomson Reuters StarMine data showed. The CSE's 14-day relative strength index is at 54.6, towards the upper neutral limit of 70. Volume hit 66 million shares on Thursday, against an average volume of 23.2 million and 49.2 million in the past five and 30 days respectively. The 90-day average volume is 63.7 million.

Sri Lanka's rupee closed firmer at 111.05/08 a dollar from Wednesday's 111.28/30 on dollar demand for stocks-related transactions, dealers said. The rupee has risen 2.96 percent in 2010.

source - www.dailymirror.lk