Saturday, January 22, 2011

Sri Lanka stx at new record on earnings, low rate hopes

 * Bourse up 0.85 pct; profit-taking seen

 * Foreign investors sells on net basis

 * Rupee edges down on importer dollar demand


 COLOMBO, Jan 21 (Reuters) - Sri Lanka's bourse hit a record high on Friday on hopes of better earning in the December quarter and a further cut in lending rates, while the rupee edged down on importer dollar demand.

 The island's main share index .CSE rose 1.15, hitting a record intraday high of 7,275.79, surpassing its previous high of 7,204.23 from Oct 4. It closed 0.85 percent or 60.91 points up at 7,254.01 a record high for the second straight day. It hit a record closing high of 7,193.10 on Thursday.

 It has been Asia's best performer with a 9.32 percent gain so far in 2011 after being the top performer last year with a 96 percent return.

 Turnover was 4.1 billion rupees ($37 million), nearly two times last year's daily average of 2.4 billion. Foreign
investors were net sellers of a net 247.9 million rupees' worth shares on Friday and they have sold a net 2.02 billion rupees so far this year after selling a record net 26.4 billion rupees in 2010.

The bourse is trading at a forward price-to-earnings (P/E )ratio of 18, highest among emerging markets, compared with 13 in Asian markets and 12 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 86, beyond the overbought limit of 70.

 The traded share volume was 213.3 million against five-day average of 166.2 million. Last year's daily average volume was 9.2 million.

 The upee LKR= closed down at 111.00/03 a dollar from Thursday's 110.92/95 on importer dollar demand, traders said.

 FACTORS TO WATCH:
  •  Corporate earnings for the December quarter
  •  Whether a technical correction will bring the bourse down
  • If foreign funds buy shares in large volumes
 source - in.reuters.com

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