Earnings, tax cut drive Sri Lanka bourse up

Saturday, 30 October 2010 07:25 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s benchmark share index rose on Friday as investors bought anticipating strong September quarter corporate results and tax cuts in the 2011 Budget due to be presented in November, analysts said.

Sri Lanka’s main share index rose 102.31 points or 1.56 per cent to 6678.05. It is still Asia’s best performer in 2010 with a 97.3 per cent gain as the island’s economy rebuilds after the end of a civil war in May 2009.

The bourse has shed 6.5 percent since hitting an all-time high of 7,207.75 on 4 October. Foreign investors were net sellers of Rs. 757.6 million worth’ of shares and they have sold a net Rs. 26.1 billion worth so far in 2010.

The bourse is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 19.7 times, compared with 13.5 and 12.7 respectively, Thomson Reuters data shows. The CSE’s 14-day relative strength index is at 55.85, between the neutral limits of 30 and 70.

Turnover was Rs. 2.6 billion ($23.7 million), more than four times the 2009 daily average and slightly above this year’s daily average of 2.4 billion.

The rupee ended weaker at 111.69/70 a dollar from Thursday’s close of 111.60/66 on importer dollar demand.