Monday, January 30, 2012

Sri Lanka bourse up on earning hopes; banks lead

* Market erase early gains amid IMF, rates concerns

* Foreign outflow at 314 mln rupees

* Rupee steady; cbank pumps in $12 mln to defend

COLOMBO, Jan 30 (Reuters) - Sri Lanka's share market closed firmer on Monday extending its positive momentum as investors snapped up financials and blue chips on better earning hopes after the market heavyweight and bellwether John Keells Holdings posted strong earnings.

The main share index ended 0.53 percent or 30.12 points at 5,755.56, its highest since Jan. 23, after retreating from a early gain of 1.78 percent.

Analysts said institutional investors are still on the sideline due to concerns over a possible rise in interest rates, depreciation in the rupee and Sri Lanka turning down the IMF's remaining $800 million of a $2.6 billion loan.

Keells gained 1.25 percent to 170 rupees, On Thursday it posted a 56 percent gain in its December quarter earnings.

Banking shares led the gain with Sampath Bank PLC gaining 6.66 percent to 190.50 rupees, while Hatton National Bank PLC rising 3.95 percent to 150.10 rupees.

Shares in Commercial Bank of Ceylon rose 1.35 percent to 105.40 rupees.

Sri Lanka's bourse is still the worst performer among Asian markets with a 5.25 percent loss so far this year. It was 10th-best in 2011, after being on top in 2009 and 2010.

Net foreign share sales on Monday were 314 million Sri Lankan rupees, but offshore investors are net buyers of 437.2 million rupees worth of shares so far this year, after a net outflows of 19.1 billion last year.

The day's turnover was 1.41 billion rupees ($12.39 million), less than last year's average of 2.3 billion. Volume was 46 million shares. Last year's daily average was a record 102.7 million.

The rupee closed flat at 113.89/90 against the dollar for a 46th straight session since a Nov. 21 devaluation with the central bank selling around $12 million to defend it, dealers said.

The bank has spent more than $1.08 billion keeping the exchange rate steady since Nov. 21. It spent a net $1.79 billion in the first 10 months of last year to keep depreciation at bay.

($1 = 113.8350 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Ed Lane)

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