Sri Lankan stocks rise on war victories, rupee hits new low

Apr 20, 2009 (LBO) – Sri Lankan shares rose across the board on Monday with investors upbeat over signs the ethnic war had reached its final stages, while the rupee hit a new low against the dollar, brokers and dealers said. Rebels leaders are believed to be hiding among the remaining civilians in the area which is surrounded by the army and navy.

In Monday’s stock trading, Chevron Lubricants Lanka Limited, a subsidiary of U.S. based petroleum giant Chevron gained one rupee to close at 115.

Hayleys gained five rupees to close at 98.

Conglomerate John Keells Holdings which has business interest in finance, transport, food processing, retail and property development sectors closed at 64 flat.

Fixed line giant Sri Lanka Telecom lost 25 cents to close at 37.75, while Dialog Telekom, subsidiary of Telekom Malaysia closed 5.25 flat.

The rupee fell steeply to 117.25 levels against the greenback after opening at 116.00/20 levels with no intervention from the monetary authority.

The rupee closed at 117.20/30, a new life low, dealers said.

The All Share Price Index of the Colombo stock exchange rose 1.09 percent (18.85 points) to end at 1,744.14 while the Milanka index of liquid stocks went up 0.76 percent (13.95 points) to close at 1,838.58.

Turnover was 129.5 million rupees.

“The market reacted positively to today’s encouraging news from the military front,” said Geeth Balasuriya of Acuity Stockbrokers.

“Today stocks rose across the board as investors expect the sentiment to improve in the coming days. Investors expect the war to finish within weeks or even days.”

Sri Lankan president Mahinda Rajapaksa said the days of the Tamil Tiger guerrillas were numbered after large numbers of civilians held hostage by the rebels on a narrow strip of land on the north-east coast escaped Monday.

The military said over 30,000 civilians had defied rebel gunfire and suicide bombings and crossed over to the army’s side after troops breached a bund the guerrillas had built as an obstacle.