Sri Lanka rupee hits 2-yr high; stx down on credit crunch

 COLOMBO, Dec 8 (Reuters) - Sri Lanka's rupee currency LKR= hit a two-year high on Wednesday due to exporter dollar selling ahead of year-end holidays, while the bourse edged down on low volumes for a third day due to low credit for retail investors.

 The rupee LKR= closed firmer at 111.00/10 a dollar, its highest since Dec. 11, 2008, from Tuesday's 111.12/15. It has risen 3 percent in 2010.

 The main share index .CSE fell 14.77 points or 0.23 percent to 6,454.31, its lowest close since Nov. 30. Asia's best performer in 2010 has gained 90.6 percent, ahead of second-ranked Indonesia's .JKSE 48.8 percent.

 Local LP gas distributor Laugfs Gas LGGL.CM, which started trading in the bourse closed 17.4 percent up at 27 rupees. It accounted for around half of the day's turnover of 1.7 billion rupees ($15.3 million), nearly three times the 2009 daily average of 593.6 million rupees.

 Foreign investors have sold a net 24.6 billion rupees in shares this year, and on Wednesday sold a net 101.9 million.

 The bourse is trading at a forward price-to-earnings ratio of 20.1, the highest in Asia, compared with all-Asia's 13.3 and global emerging markets' 12.3, Thomson Reuters StarMine data showed. The CSE's 14-day relative strength index is at 45.9, between the lower and upper neutral limit of 30 and 70.

 Trading volume rose to 107.9 million shares on Wednesday, against average volume of 77.1 million and 52.6 million in the past five and 30 days, respectively. The 90-day average volume is 70.4 million.

 FACTORS TO WATCH:

•  SEC moves to increase market liquidity [ID:nL3E6N70AF]

• Moves by the central bank to curb rising inflation

• Whether forex control relaxation will attract more foreign buying in shares or corporate debentures

• Extent of the rupee's rise and how the central bank might ease appreciation pressure [ID:nSGE6AM0AB]

 source - www.reuters.com