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Saturday, March 5, 2011

Foreign buying boosts Sri Lanka bourse; rupee up

* Net foreign inflow around 4 bln rupees

* Foreign investors buying after 15 net selling sessions

* Rupee ends firmer; cenbank narrows dlr trading band

COLOMBO, March 4 (Reuters) - Sri Lanka's stock market rose on Friday from a three-week low, boosted by 4 billion rupees net foreign inflow when Fortis Global Healthcare Holdings buying a 28.6 percent stake in Lanka Hospitals LHCL.CM.

The island's main share index .CSE gained 1.91 percent or 143.98 points to 7,664.72 from its lowest close since Feb. 22. It hit a record closing high of 7,811.82 on Feb 14.

Fortis on Friday said it had acquired a 28.6 percent stake in Sri Lanka's Lanka Hospitals Corp., which runs a 350-bed facility and is majority-owned by the state-run Sri Lanka Insurance Corp. [ID:nSGE7230DI]

The Colombo Stock Exchange in a statement said the deal was worth 3.975 billion rupees.

Foreign investors were net buyers for the first time in 16 sessions with a net 3.9 million rupees on Friday, but they have sold a net 3.6 billion rupees' worth shares in 2011, after selling a record net 26.4 billion in 2010.

The bourse has still been Asia's best performer with a 15.5 percent gain in 2011 after being in the region's top spot with a 96 percent return last year.

Turnover was 7.7 billion rupees ($69.6 million), three times last year's average of 2.4 billion rupees and two times this year's daily average of 3.7 billion rupees.

Traded share volume was 159.2 million, against a five-day average of 85.7 million. The 30-day and 90-day average trading volumes were 109.2 million and 67.6 million respectively. Last year's daily average volume was 67.9 million.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 16.1, one of the highest among emerging markets, compared with 12.8 in Asian markets and 11.7 in global emerging markets, Thomson Reuters StarMine data showed.

The rupee LKR= closed firmer at 110.35/43 a dollar from Thursday's close of 110.67/70 on hopes of dollar inflows due to stock-related activities and the central bank narrowing the dollar trading band to 110.10/110.60 from 110.10/70, dealers said.

FACTORS TO WATCH:

- Impact of higher inflation on the bourse

- A further technical correction

- The rate of the selloff related to the Middle East/North Africa crises

- The extent of rupee appreciation the central bank will allow to curb inflation from expensive imports

source - in.reuters.com