Stock market gains

Saturday, 28 May 2011 00:59 - - {{hitsCtrl.values.hits}}

nSpeculative demand on CDIC on possible sale of stake in insurance firm

nRupee down on importer dollar demand

COLOMBO (Reuters) - Sri Lanka’s stock market gained on Friday, led by a 50 percent jump in illiquid financial firm Capital Development and Investment , on speculation it could profit sharply from selling its stake in an insurance firm.

Sri Lanka’s main share index closed 0.54 percent or 40.14 points firmer at 7,459.58, to its highest since 20 May.

Capital Development closed at a record Rs. 404.20 and analysts said speculation it would sell its share in an insurance firm owned by National Development Bank helped boost shares in thin volume and turnover.

National Development Bank gained 2.2 percent.

The day’s turnover was 2.38 billion Sri Lanka rupees ($21.7 million), in line with last year’s average of 2.4 billion, but below this year’s daily average of 2.83 billion.

Foreign investors were net buyers for 54.5 million rupees’ worth of shares on Friday. But they have sold a net 6.2 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

Traded volume was 103.7 million against a five-day average of 139.3 million. The 30-day and 90-day average trading volumes were 79.4 million and 97.5 million respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with a 12.4 percent gain, after bringing in the region’s top return of 96 percent last year.

The rupee edged down to 109.87/90 a dollar from Thursday’s 109.85/90 on heavy importer dollar demand despite the Central Bank widening the trading band by 10 cents, reducing the lower band to 109.40 from 109.50, dealers said.