Jan 28, 2009 (LBO) – Sri Lankan shares ended barely changed Wednesday with Lanka Cement the most actively traded on anticipation of a revival in its fortunes if the war ends soon and construction activity picks up, brokers said.
The All Share Price Index ended up 0.62 percent (11.22 points) at 1,812.21 while the more liquid Milanka eased 0.26 percent (5.34 points) to close at 2,010.08.
Turnover was 96 million rupees.
Arjuna Dassanayake of DFCC Stockbrokers said share trading was still mostly by small investors although a few funds and high-net-worth individuals were selectively picking stocks.
Investors were drawn to Lanka Cement given its potential if an early end to the ethnic war revives construction activity, he said.
The stock rose almost 20 percent (two rupees) to 12.25 rupees with 2.2 million shares traded, generating about a quarter of the day’s turnover.
Lanka Cement has a defunct cement plant in northern Jaffna sitting on a rich deposit of limestone, the basic raw material for cement manufacture.
The plant has drawn interest from foreign cement firms who want to repair it or build a new one now that Tamil Tiger rebels have been driven out of the region and are about to be defeated.
Commercial Bank lost 2.25 rupees to close at 96 rupees after the central bank said payments on state-owned Ceylon Petroleum Corporation oil hedge deals to banks remain frozen.
There was also specualitve trading in Ceylinco Insurance on reports it might change hands with the controlling shareholder, the Ceylinco group, divesting its holdings.
Ceylinco has said it wants to sell its controlling share in another group unit, Seylan Bank, to faise funds to pay off depositors in another unlisted subsisdiary that collapsed.
Dassanayake said he believes the share market appears to have bottomed out with some stocks being ‘oversold’ during the bear run last year.
Although many companies are expected to report lower earnings in the last quarter, Daasanayake said economic activity and the stock market could pick up if the war ends.
The Sri Lankan military has cornered the rebels in the island’s north-east corner and said it can finish them off soon.