Sri Lanka IOC unit gains on earnings outlook as oil prices fall

Aug 06, 2008 (LBO) – Stocks closed higher Wednesday with the indices lifted by gains in the Sri Lanka unit of Indian Oil Corp as lower crude oil prices improved its earnings outlook, brokers said.

Dialog Telekom was flat at 13.50.

All plantations shares ended stronger after the island’s tea exports and earnings hit record levels in the first half of the year.

“The record earnings of the tea industry are showing up on the results of most tea companies,” said Thangarajah of First Guardian Equities. The All Share Price Index closed up 0.69 percent (16.97 points) at 2,471.80 while the Milanka rose 1.01 percent (29.36 points) to 2,949.39. Turnover was 517 million rupees.

Lanka IOC (LIOC) was the most actively traded stock, rising 11.63 percent or 2.50 rupees to 24 rupees with 2.26 million shares changing hands.

“The outlook for LIOC has improved with global oil prices coming down,” said Mohan Thangajarah of First Guardian Equities. “Its price is being pushed up on expectations of improved earnings.”

Crude prices have slumped by 20 percent since hitting record highs above 147 dollars on July 11 and are now around 118 dollars per barrel.

Sri Lanka Telecom gained 1.63 percent or 75 cents to 46.75 rupees while John Keells Holdings was up 1.23 percent or 1.25 to 103 rupees.

There were crossings in Distilleries and Cargills.

Distilleries rose 1.13 percent or a rupee to 89.25 with over 1.7 million shares traded while Cargills went up 2.03 percent or 75 cents to 37.75 rupees with almost a million shares done.