Sri Lanka small investors nibble at strong stocks

Apr 06, 2009 (LBO) – Sri Lankan shares edged up Monday supported by blue chip price increases in low volume trade, as small investors took tentative steps to invest in fundamentally strong stocks, brokers said. Mobile giant Dialog Telekom gained 10 cents to close at 4.90, while fixed line operator Sri Lankan Telecom gained 75 cents to close at 35 rupees.

Oil palm plantation company, The Bukit Darah, lost 13 rupees to close at 777.

The All Share Price Index was up 0.95 percent (15.16 points) to end at 1,652.80 while the more liquid Milanka gained 1.26 percent (21.8 points) to close at 1,747.81.

Turnover was 46.3 million rupees.

“The investors are moving into the market cautiously,” said Thakshila Hulangamuwa of Asha Phillip Securities.

“Most of the first 10 stocks that made up a high percentage of the market volume are companies with decent growth prospects and strong fundamentals.”

Analysts said the market could recover now that an end to the ethnic war was in sight.

The war and the global financial crisis had hit company earnings in the last few quarters keeping the stock market in the doldrums.

High interest rates that had enticed money away from equities were also coming down.

In Monday’s transactions, Ceylon Tobacco Company (CTC), a subsidiary of British American Tobacco (BAT), gained four rupees to close at 100.

Sri Lanka’s second largest private bank, Hatton National Bank (HNB), gained 3.50 rupees to close at 79.75.

Distilleries Company of Sri Lanka gained 11.50 rupees to close at 67.25.