Sri Lanka investors drive up Lankem in plantations chase

Feb 26, 2008 (LBO) – Sri Lankan stocks closed higher Tuesday with investors driving up the price of Lankem Ceylon, a group with interests in plantations which are seen making higher profits, brokers said. The All Share Price Index gained 6.64 points or 0.26 percent to close at 2,527.62 while the more liquid Milanka index went up 19.83 points or 0.63 percent to close at 3,189.05 with turnover being 371 million rupees.

Lankem Ceylon was the day’s top gainer, going up 7.75 rupees or 18.45 percent to 50 rupees according to the volume weighted average price with 431,700 shares traded.

The company owns Kotagala Plantations, one of the listed plantations firms which are being sought after by investors as they have been reporting higher profits on the back of the commodities boom.

The Colombo Fort Land & Building Company (CFLB), which has a stake in Lankem, topped the day’s turnover with 1.7 million shares traded and contributing 39.8 million rupees to total turnover.

The stock went up 2.50 or 11.76 percent to 23.75 rupees.

“CFLB was strong today on Kotagala,” said Arjuna Dassanayake of DFCC Stockbrokers. “The whole group is moving up on potential earnings from Kotagala. It’s all retail play.”

Plantations stocks are seen doing well on higher prices for tea, rubber and palm oil.

Lanka Cement, which has been trading on speculation over a proposed takeover by India’s Birla group, went up 50 cents or 3.39 percent to 15.25 rupees, although it was traded at a low of 14 rupees.

The stock accounted for the day’s fourth highest turnover with 1.1 million shares traded.

Leading celco Dialog Telekom, a unit of Telekom Malaysia, moved up 50 cents to 18.50 rupees and helped push up the indices, Dassanayake said.

A total of 364,600 shares of Dialog changed hands. .