(Reuters) - Malaysia's state investment arm, Khazanah Nasional, has taken an 8.8 percent stake in top Sri Lanka conglomerate John Keells Holdings for about $120 million, three sources said on Friday, in line with Sri Lankan efforts to boost foreign investment in stocks.
The main seller was the island nation's largest pension fund, the Employee's Provident Fund (EPF), which is managed by the central bank, two central bank officials said on condition of anonymity.
Ajith Nivard Cabraal, the central bank governor, confirmed the bank had taken steps consistent with it efforts to boost foreign investment in the country's share market, but declined to give details.
The central bank has targetted a $500 million net inflow into the share market this year, after outflows of $168 million in 2011 and $240 million the year before. Foreign buyers had invested a net $25.7 million so far this year before the Keells sale.
Khazanah acquired 74 million shares in Keells in 29 block deals for about $120 million, the sources with direct knowledge of the deal said.
Keells shares were down 0.2 percent at 0620 GMT, but the trades boosted wider investor sentiment on the Colombo bourse and took turnover to its highest level since April 1, 2008.
The country's main stock market index soared after the end of a 25-year civil war in mid-2009 but has performed poorly this year, down 10.4 percent against a 13.6 percent gain for MSCI's Asia Pacific ex-Japan index.
Foreign investors still see the market as overheated, and have also been discouraged from investing by lack of liquidity, insider trading, and market manipulation, mainly driven by local retail investors, analysts say.
source - www.reuters.com
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