Wednesday, July 27, 2011

Market gain on speculation

* Market oversold; Amana accounts for 78 pct of
* Banks help gain on earnings hope; Keells posts 35 pct
* State bank protects rupee amid importer dlr demand

COLOMBO, July 27 (Reuters) - Sri Lanka's stock market edged
up on Wednesday mainly on retail buying of banking shares in an
oversold bourse, fuelled by speculation the Securities and
Exchange Commission (SEC) may relax an order to end margin
The main share index gained 0.2 percent or 11.98
points to 6,505.56. It hit a more-than seven-month low on Monday
after negative comments on insider trading.
Analysts said retail investors were snapping up beaten
shares on a rumour the SEC may relax a directive to eliminate
margin trading by the year's end, which have hit the market
Since June 1, the index has shed 11.9 percent, mainly due to
forced selling to meet the deadline.
The 14-day Relative Strength Index gained to 29.3 from
Tuesday's 28, but was still below the oversold level of 30,
Thomsonreuters data showed.
Banks led the gain on earning hopes with the fourth largest
lender DFCC gaining 4.8 percent and top lender
Commercial Bank of Ceylon rising 1.4 percent. The
second biggest bank HNB closed 1.9 percent firmer.
Market heavyweight John Keells Holdings added 0.4
percent before posting a 35 percent gain in its June quarter net
Islamic lender Amana Bank, which will start commercial
banking operations shortly, bought 15 percent of Amana Takaful
, boosting the turnover.
Amana, which closed flat, accounted for 78 percent of the
day's total volume of 191.3 million. The bourse' five-day
average is 104.8 million. The 30-day and 90-day average trading
volumes were 101.2 million and 105.7 million, respectively. Last
year's daily average was 67.9 million.
The day's turnover was 1.97 billion Sri Lanka rupees ($18
million), below last year's average of 2.4 billion and this
year's 2.7 billion.
The bourse is down 1.96 percent so far this year, after
being Asia's best performer in 2009 and 2010, with 124 percent
and 96 percent respectively due to optimism over the economy
after the end of a 25-year war in May 2009.
Foreign investors were net sellers of 10.2 million rupees
worth of shares on Wednesday. They have sold 7.7 billion rupees
in 2011 after a record outflow of 26.4 billion in 2010.
The rupee ended steady at 109.49/50 a dollar for
an eighth straight day after gaining to 109.42 due to panic
dollar sales by exporters, who expected a sharp rise after a $1
billion inflow from a sovereign bond sale last week.
However, dealers said a state bank, through which the
central bank directs the market, bought dollars at 109.50 to
keep the currency steady.

- June quarter earnings of listed firms
- If foreign investors buy shares in large volumes.
- The extent of the rupee's appreciation.

Colombo Stock Exchange:
Stock Market Volume (Shares)
Current Volume Average Volume 30 Days
191,253,747 101,161,176

Yield and Price of Sri Lanka's sovereign bonds:
Maturing year Tenure amount Reuters yield
2012 5-yr $500 mln 3.031-2.634
2014 5-yr $500 mln 4.193-3.901
2020 10-yr $1,000 mln 5.8920-5.7525
2021 10-yr $1,000 mln 5.9838-5.8519

* For Sri Lankan treasury securities benchmarks and data,
please click and
* For interbank lending rate or call money rate or

* For secondary market rates, please see <0#LKBMK=>.
($1 = 109.495 Sri Lanka Rupees)

(Reporting by Ranga Sirilal; Editing by Shihar Aneez and Bryson

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