Sri Lanka bourse at record high on low interest rate

 * Market up 0.7 pct; hits new peak; up 82.4 pct YTD

 * Investors bet on shares due to low rates, excess liquidity

* Rupee up on exporter dollar selling

 COLOMBO, Sept 14 (Reuters) - Sri Lanka's benchmark share index hit a new record high again on Tuesday as excess liquidity in a low interest rate regime prompted investors step into the bourse instead of fixed income assets, analysts said.

 Sri Lanka's main share index .CSE jumped 0.72 percent or 43.84 points to hit a record high of 6,175.06. It touched an intraday high of 6,236.07 points. The index is Asia's best performer in 2010 with a 82.4 percent gain.

 Analysts said low yields in fixed income assets have increasingly left investors choosing the share market despite some warnings the bourse had already overheated.

 Analysts also said expected economic stability after the ruling party easily passed a constitutional amendment last week have also helped boost the bourse.

 The financial sector index .CSEBF hit a record high led by 9.2 percent gain in leasing firm Capital Trust LOLC.CM and 4.5 percent rise in top private lender Commercial Bank of Ceylon. COMB.CM.

 Turnover was 3.9 billion rupees ($34.3 million), more than six times the 2009 average. Foreign investors sold a net 96.1 million rupees' in shares and have overall sold a net 14.2 billion rupees' worth this year.


 FACTORS TO WATCH

•  Economic growth in the April-June quarter expected to be announced on Wednesday
•  Sri Lanka's sovereign rating from Fitch and Moody's after S&P raising it to B+ on stable outlook. [ID:nWLA2890]
•  Investor reaction to Sri Lanka's $1 billion sovereign bond at road shows starting on Wednesday in Singapore.

• Tax reforms promised by the government

source - www.reuters.com