Sri Lankan stocks rally in anticipation of military triumph

Jan 02, 2008 (LBO) – Sri Lankan retail investors pushed the market up sharply in moderate trade Friday in anticipation government forces had captured the northern Tamil Tiger stronghold of Kilinochchi. Brokers said foreign investors might make use of the rally to sellout.

Blue chip John Keells Holdings (JKH) contributed 25.7 million rupees to the day’s turnover, while Commercial Bank contributed 12 million rupees.

JKH was up 1.25 rupees to close at 51.25, Seylan Bank gained three rupees to close at 31.50, Commercial Bank was up four rupees to close at 71, Sri Lanka Telecom was up 3.25 rupees to close at 34.25 and Dialog Telekom closed flat at six rupees. The All Share Index (ASI) index shot up 5.02 percent (75.44 points) to close at 1,578.46 points while the Milanka Index went up by 4.01 percent (65.47 points) to close at 1,696.81 points.

Foreigners were net sellers with foreign buying at 8.6 million rupees and foreign selling at 24 million rupees.

“It was a retail driven market today with most institutions and high net worth individuals opting to stay out of the market,” said Geeth Balasuriya of HNB Stockbrokers.

“We can expect positive sentiments to get a boost with stronger volumes next week.
“If the market goes up further we can expect some profit taking, which would put pressure on the indices,” said Balasuriya.

After the market closed, President Mahinda Rajapaksa, in an unannounced televised speech, declared that government troops had captured Kilinochchi.

Troops had battled the Tigers for months before they captured the town which the rebels had declared as the de facto capital of the separatist state they are fighting for.

Brokers said that in Friday’s share market all sectors went up.