Sri Lanka stocks close up, Equity One soars on speculative trading

Sri Dharanee Performance Arts Theatre

Aug 28, 2008 (LBO) – Sri Lankan stocks closed higher with the illiquid Equity One driven up by over 50 percent on speculative trading by retail investors, brokers said. Lanka IOC has doubled profits in the June 2008 quarter to just over a billion rupees.

Dedigama said falling interest rates may have made stocks comparatively more attractive to retail investors.

The few foreign investors in the market were looking at stocks with strong financials.

The stock market has been in the doldrums for months as investors are worried high inflation and interest rates are eroding company profitability.

Inflation has begun to fall but is still higher than deposit rates.

Over a million shares of Maskeliya Plantations were done with the stock ending flat at 25.75.

Brokers said the trading appeared to be by institutional investors or high net-worth individuals.

Most plantations companies have been enjoying strong earnings owing to high tea, rubber and palm oil prices, but there are fears commodities are on the decline.

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The All Share Price Index went up 0.62 percent (14.85 points) to 2,421.24 while the Milanka also ended firmer, up 0.45 percent (12.68 points) at 2,805.55.

Turnover was 342.8 million rupees.

Equity One, which is in property development and renting office space, was the most actively traded stock and the highest gainer, shooting up 55.17 percent or by 12 rupees to 33.75 rupees.

Brokers said the largely illiquid stock was being pushed by speculative trading with almost 1.5 million shares changing hands.

John Keells Holdings closed down 25 cents at 99.75 rupees with 406,500 shares traded while Indian Oil’s local unit, Lanka IOC, went up 4.30 percent or one rupee to 24.25 rupees with 614,900 shares changing hands.

“Today, it was predominantly retail driven, except for a few foreign trades like JKH and LIOC,” said Dihan Dedigama of Asia Securities.

“The rest was all retail.”