Stock market at new record on earnings, low rate hopes

Saturday, 22 January 2011 00:51 -     - {{hitsCtrl.values.hits}}

COLOMBO,  (Reuters) - Sri Lanka’s bourse hit a record high on Friday on hopes of better earning in the December quarter and a further cut in lending rates, while the rupee edged down on importer dollar demand.

The island’s main share index <.CSE> rose 1.15, hitting a record intraday high of 7,275.79, surpassing its previous high of 7,204.23 from Oct 4. It closed 0.85 percent or 60.91 points up at 7,254.01 a record high for the second straight day. It hit a record closing high of 7,193.10 on Thursday.

It has been Asia’s best performer with a 9.32 percent gain so far in 2011 after being the top performer last year with a 96 percent return. Turnover was 4.1 billion rupees ($37 million), nearly two times last year’s daily average of 2.4 billion. Foreign investors were net sellers of a net 247.9 million rupees’ worth shares on Friday and they have sold a net 2.02 billion rupees so far this year after selling a record net 26.4 billion rupees in 2010.

The bourse is trading at a forward price-to-earnings (P/E )ratio of 18, highest among emerging markets, compared with 13 in Asian markets and 12 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 86, beyond the overbought limit of 70.

The traded share volume was 213.3 million against five-day average of 166.2 million. Last year’s daily average volume was 69.2 million.

The Rupee <LKR=> closed down at 111.00/03 a dollar from Thursday’s 110.92/95 on importer dollar demand, traders said.