Jan 15, 2008 (LBO) – Sri Lanka stocks rallied 3.3 percent Thursday with punters bullish on plantation stocks and steep falls in the risk free interest rates over the week, dealers said. The Colombo All Share Index closed up 3.34 percent (52.62 points) at 1,628.87. The Milanka Index of liquid stocks closed up 4.94 percent (81.76 points) at 1,737.47, on a turnover of 118 million rupees.
Analysts said the plantation sector’s rally was driven by a recent rebound in tea prices which were hit by a global collapse in commodity prices.
Udapussellawa Plantations was up 5.00 rupees to close at 23.00 rupees, Watawala Plantations was up 4.00 rupees to close at 67.75 and Malwatte Plantations was up 4.50 rupees to close at 26.50. Tea Smallholder Factories was up 10 rupees, to close at 80.00.
“The plantation sector is attracting buyers with the recovery of tea prices,” Thakshila Hulangamuwa of Asha Phillip Securities said.
“The positive speculation on the war front is boosting investor’s sentiment amongst domestic buyers.
“With the positive news in the adjustment in the rate, the market could attract some funds on some of the discounted counters.”
Gilt rates fell between 100 to 150 basis points on all maturities over the week.
Meanwhile the military said it had completely cleared the Jaffna peninsula of Tamil Tigers this week and are moving in on the last remaining guerilla stronghold in Mullaithivu.
The government also announced a 6.00 percent interest subsidy for tea factories.
Bukhit Darah, a holding company of Malaysian palm oil plantations, was up 27.25 to close at 747.25.
Nestle Lanka, a fast moving consumer goods firm, was up 10 rupees to close at 290, while Distilleries Company of Sri Lanka was up 5.00 rupees, to close at 62.00.
Sri Lanka Telecom closed flat at 33.25 rupees, Dialog was up 35 cents at 5.25 rupees, John Keells Holdings was up three at 59.75 rupees.