Sri Lankan stocks up, investors buy blue chips

June 10, 2009 (LBO) – Sri Lankan shares closed up Wednesday as retail investors moved back to safe stocks from speculative counters, while tycoon Harry Jayawardena controlled Aitken Spence continued its bull-run, brokers said. “Investors who walk into the market should at least look at a three month investment horizon, as at present levels the market has gained well over 30 percent within a relatively short period of time.”

John Keells Holdings gained one rupee to close at 113.00, while Central Finance Company gained 7.25 rupees to close at 217.50, on thin volumes.

Celco giant Dialog Telekom, a subsidiary of Telekom Malaysia closed flat at 5.50 rupees.

Foreigners brought 103.0 million rupees worth of shares and sold 106.0 million rupees worth, resulting a net outflow of 3.0 million rupees.

Dealers said the spot dollar remained unchanged at 114.90/95 levels in late afternoon trade.

The Colombo All Share Price Index closed up 0.44 percent (9.64 points) to end at 2,202.43 while the Milanka index of liquid stocks gained 0.35 percent (8.56 points) to close at 2,468.83, according to provisional stock exchange data.

Turnover was 368.4 million rupees.

“Investors were shifting from more speculative counters to blue chips and fundamentally strong stocks,” said Thakshila Hulangamuwa of Asha Phillip Stockbrokers.

“Some of the speculators last week got burnt in the overheated environment of the bourse as shares were pushed to unrealistic levels.”

Diversified Aitken Spence gained 64.75 rupees to close at 663.75. During the last five days Aitken Spence gained 190.00 rupees, brokers said.

Stassens Group of which Aitken Spence is a subsidiary, lost ownership of Sri Lanka Insurance Company (SLIC) last Thursday.

Last Thursday a three bench jury headed by former Chief Justice Sarath Silva announced the 2003 privatization of SLIC to Distilleries Company of Sri Lanka was ‘illegal’ and made the transaction null and void.

Distilleries lost one rupee to close at 77.00.

“Corporate earnings being published now are not supporting any immediate future growth of the market,” said Hulangamuwa.