Sri Lanka shares surge on palm oil hopes

Feb 14, 2011 (LBO) – Sri Lankan shares surged to a new high Monday as investors continued to buy into firms with oil palm plantations anticipating higher earnings on high commodity prices, brokers said. The All Share Price Index closed at 7,811.82, up 2.97 percent (225.19 points) while the more liquid Milanka index fell 0.15 percent (11.00 points) to close at 7,248.81, according to stock exchange provisional figures.

Turnover was 5.3 billion rupees.

Monday’s surge made two firms with oil palm interests, conglomerate Carson Cumberbatch and its subsidiary The Bukit Darah, the second and third largest firms on the Colombo bourse in terms of market capitalisation.

Carson group firms, which have oil palm plantations in Indonesia and Malaysia, were among the highest gainers of the day.

Selinsing closed at 1,450 rupees, up almost 50 percent or 481.10 rupees, Shalimar (Malay) ended at 1,172.40, up 49 percent or 387.70 rupees and The Good Hope, closed at 1,665.10, up 47 percent or 534.10 rupees.

The Bukit Darah closed at 1,540.20, up 29 percent or 344.50 rupees while Carson Cumberbatch itself ended at 729.80, up 21 percent or 128 rupees.

Palm oil prices are near the highest level in almost three years owing to rising demand and lower cops with lower output and stockpiles in key producers like Malaysia.

However, analysts have warned the edible oil’s rally might not last as high prices reduce demand.

Other Carson group firms, especially investment companies also benefitted from Monday’s stock market rally except for Guardian Capital Partners, previously known as Watapota, a Carson group investment firm.

Guardian Capital Partners, which had shot up last week, was the day’s biggest loser, falling 13 percent or 1,262.50 rupees to close at 8,750.

There were six crossings or private deals of 3.66 million shares in Hatton National Bank all at 410 rupees a share, and a single crossing of 198,400 shares at 398 rupees each. The stock closed at 408.80, up 10.60.