May 21, 2009 (LBO) – Sri Lankan shares surged Thursday led by blue chips as investors ignored a crop of weak quarterly results to focus on future earnings with the end of the decades-old war, brokers said. Hatangala said he expects the upbeat mood to prevail, now that the conflict that acted as a drag on the economy has ended.
“We expect some improvement but there maybe some profit taking as well,” he said.
“If the funds show more interest on stocks then we can see some stability in the market.”
The government has declared an end to the 25-year-old ethnic war with the army wiping out Tamil Tiger rebel remnants and its top leaders in a final assault earlier this week.
The All Share Price Index rose 5.25 percent (106.93 points) to end at 2,142.52 while the more liquid Milanka shot up 9.05 percent (203.95 points) to close at 2,458.65, according to provisional stock exchange figures.
Turnover was 1.5 billion rupees.
The ASPI is up 42.54 percent and the Milanka up 44.9 percent since the beginning of this year with the indices rising by 12.3 percent and 18.9 percent since the close of last week.
“We saw active trading on all counters with positive sentiment prevailing throughout the day. We saw a lot of interest in blue chips and banks,” said Chinthana Hatangala of Lanka Securities.
Most stocks made gains and only a few lost value and both small investors and funds were trading in the market, Hatangala said.
“Investors are ignoring the corporate results. We canâ€™t expect good results especially in the January-March quarter because most companies got affected by the economic slowdown.
“But without considering historical earnings, people are focusing more on future earnings potential.”
Sharp gains in John Keells Holdings (JKH), National Development Bank (NDB) DFCC Bank and Commercial Bank were the main reasons the indices went up, Hatangala said.
JKH shot up 16.49 percent (15.75 rupees) to close at 111.25 rupees, NDB rose almost 20 percent (19.50 rupees) to 118 rupees, DFCC Bank went up 13 percent (12.75 rupees) to 110.75 rupees and Commercial Bank rose 12.68 percent (13.25 rupees) to 117.75 rupees.
Dialog Telekom was flat at 5.50 rupees with over 38 million shares traded.
JKH made the highest contributor to turnover followed by Dialog.