Sri Lanka shares hold their ground

Oct 02, 2008 (LBO) – Sri Lankan shares ended several days of falls to close marginally firmer Thursday but on very small volumes with investors still cautious owing to uncertainty in the global and local economy, brokers said.

Lanka Cement closed up 25 cents at 11.25 with 124,100 shares traded.

The company’s stock has been heavily traded after news that foreign cement firms are keen on reviving its defunct cement plant in northern Jaffna.

“These are the stocks that will perform if Kilinochchi gets cleared,” said Dassanayake.

Industrial development minister kumara welgama, who overseas the state-owned Lanka Cement, has said the cement plant could be revived only after army operations clear the northern Kilinochchi region of Tamil Tigers.

The Tigers have artillery units in the northern region that have the range to shell the army base within which the Lanka Cement plant is now located.

In Thursday’s trading on the Colombo bourse, foreigners were more on the buying side.

There was a net foreign inflow of 4.2 million rupees with purchases of 16.2 million rupees and sales of almost 12 million rupees.

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The All Share Price Index was up 0.30 percent (6.35 points) at 2,148.61 while the more liquid Milanka went up 0.43 percent (10.35 points) to 2,407.54. Turnover was 84.9 million rupees.

Arjuna Dassanayake of DFCC Stockbrokers said investors remained cautious and were staying away from the market.

“There are bargain hunters who had been prepared to buy at lower levels but they’ve been out of the market since the global financial crisis began.”

He expects trading to remain thin unless there were strategic deals which could prod investors out of their slumber.

Dialog Telekom was the most actively traded stock, ending flat at eight rupees according to the volume weighted average price, with buying in the morning pushing up the indices.

The indices were also propped up by gains in other blue chips, with John Keells Holdings edging up 50 cents to 87 rupees, Sri Lanka Telecom closing up 50 cents at 42 rupees, and Commercial Bank up 1.75 at 104 rupees, all on small volumes.