Thursday, April 19, 2012

Sri Lanka stx surge 2% after SEC lifts price band

* Bourse at 2-mo high; volume, turnover still low

* SRupee dips on importer dlr demand; more fall expected

 (Reuters) - Sri Lanka's stock market jumped more than 2 percent on Thursday to a two-month high after the Securities and Exchange Commission (SEC) suspended a 10 percent price band on price movements.

The main share index leapt 2.1 percent or 111.25 points to 5518.72, its highest since Feb 24 while recording its highest gain in a day since Feb. 22.

The regulator on Thursday suspended a 10 percent limit on share price movements with immediate effect after repeated requests from brokers, who said it was hitting market volume and sentiment.

The market has been declining recently due weakness in the rupee which has depreciated more than 12 percent since Feb. 9. Other bearish factors include market interest rates rising more than 200 basis points since February and the government raising fuel prices by up to 40 percent.

The day's turnover was 359.3 million Lanka rupees ($2.80 million), well below this year's daily average of 1.32 billion rupees.

The market enjoyed a net foreign inflow of 49.2 million rupees, extending the net foreign buying to 21.2 billion rupees so far in 2012.

The rupee fell 0.9 percent to close at 129.70/90 a dollar compared to Wednesday's close of 128.60/70 due to considerable importer dollar demand.

Currency dealers said the market is bracing for further depreciation when the central bank stops its dollar supply to meet oil bills from the next month. ($1 = 128.4500 Sri Lanka rupees) (Reporting by Shihar Aneez/editing by Chris Pizzey)

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