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Friday, June 17, 2011

Sri Lanka bourse recovers from 5-mo low; rupee up

* Bourse recoups losses from 5-mo low on bargain hunting; low liquidity weighs

* Foreigners buy 761.9 mln rupees worth shares on net basis for the week

* Rupee edges up after central bank comments

COLOMBO, June 17 (Reuters) - Sri Lanka's stock market recovered from its five-month closing low on Friday as investors picked up shares battered in the recent fall, but low liquidity weighed on the market, while the rupee edged up after central bank said it will allow little volatility. Sri Lanka's main share index edged up 0.49 percent or34.32 points to 7,050.03, inching up from its lowest since January 17.

"The indices rebounded on renewed buying interest in predominantly small cap counters," John Keells Stockbrokers said in a note. Over 6 billion rupees of cash has been locked in the recent IPOs by conglomerate ExpoLanka Holdings , which started trading on Monday, and Softlogic Holdings, which is yet to start trading on the stock exchange, bourse data showed. Foreign investors were net buyers of 16.6 million rupees worth of shares on Friday extending the weekly inflow to 761.9 million for the week, but they have sold a net 6.23 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

The day's turnover was 2.54 billion Sri Lanka rupees ($23.2million), slightly above last year's average of 2.4 billion but below this year's daily average of 2.93 billion. Traded volume was 212.6 million, against a five-day average of 223.4 million. The 30-day and 90-day average trading volumes were 178.7 million and 105.5 million, respectively. Last year's daily average was 67.9 million. The bourse is still Asia's best performer in 2011 with a 6.2 percent gain, after bringing in the region's top return of 96 percent last year.

The rupee closed tad firmer at 109.55/58 a dollar from Thursday's 109.57/60 after the central bank said it will main the currency steady with little volatility. It hit a high of 109.30 a dollar on June 9, its highest
since Oct. 30, 2008, Reuters data showed.

FACTORS TO WATCH: -

- Investor response for cenbank's steady monetary policy rates announced on Tuesday

- If foreign investors buy shares in large volumes - If Sri Lanka can achieve an 8.5 pct growth target amid
rising global oil prices and inflation

- The extent of the rupee appreciation

source - www.reuters.com