July 27, 2010 (LBO) – Sri Lankan stocks hit a new high Tuesday, crossing 5,000 points for the first time before falling back as investors bought in anticipation of higher company earnings and foreign funds entering the market, brokers said. Company earnings are also improving with the improved business climate and lower interest rates and inflation.
Dialog Axiata was the most heavily traded in terms of volumes, closing flat at 10.50 with 16.4 million shares changing hands.
The firm reported a profit of 1.37 billion rupees in the June 2010 quarter compared with a loss a year ago.
A million Dialog shares changed hands in a privately negotiated off-the-floor deal at 10.75 rupees a share.
There was also a crossing of 465,000 National Developemnt Bank shares at 240 rupees each and 500,000 Lanka Tiles at 105 rupees a share. The All Share Price Index closed at 4,999.05, up 1.12 percent (55.52 points), after crossing the 5,000-point mark during intra-day trading while the more liquid Milanka index rose 1.31 percent (73.29 points), to close at 5,669.19.
Turnover was 2.3 billion rupees, according to stock exchange provisional figures.
The market is now the best performing bourse, up almost 48 percent this year, according to Bloomberg newswires.
“Investors bought in anticipation of more foreign funds coming into the market,” said Vajirapani Bandaranayake, an analyst at Bartleet Mallory Stockbrokers.
Sri Lanka’s markets regulator has just given a license to India Infoline which is expected to invest its own funds as well as those of other investors keen to benefit from the island’s anticipated post-war economic revival.
Sri Lanka’s 30-year ethnic war ended in May 2009, resulting in an immediate upturn in the economy which is expected to grow seven percent this year.