Sri Lankan shares rose to a two-month high

S.Lanka stocks at 2-month high as Keells rise, The All-Share Price Index .CSE of the Colombo Stock Exchange closed 12.49 points firmer at 3,089.45, its highest close since Oct. 16.

Top conglomerate John Keells Holdings closed 0.63 percent to a new over two-year high of 160.25 rupees a share.

"A new U.S. based fund bought Keells shares and the sellers were institutional," an analyst said on condition of anonymity.

Keells accounted for over 88 percent of the day's turnover of 5.3 billion rupees ($46.2 million), its highest since July 28, last year. The daily average in 2008 was 464 million rupees. Net foreign buying hit 2.36 billion rupees, mainly from Keells trade.

Analysts said the foreign buying in the past few days has improved investor confidence, which had been declining since the government announced an early national election next year.

Sri Lanka's presidential election is scheduled for Jan. 26 and it will be followed by parliamentary election due by April.

Sri Lanka's stocks closed 1.65 percent lower Nov 05, 2009

Sri Lanka's stock index .CSE fell 1.65 percent to its lowest close in nearly 2 months on Thursday, as economic woes and trade union protests ahead of national polls rattled investor confidence. The benchmark Colombo All Share Index closed down 47.88 points lower at 2,954 and the Milanka Index of liquid stocks fell 1.06 percent (34.33 points) to 3,207.7 points according to the provisional Colombo Stock Exchange data.

The bourse has fallen 8.83 percent after the government said on Oct. 13 it will hold national polls by April.

Frequent protests and trade union actions have dampened investor confidence, which had been already on the decline on worries of political uncertainty ahead of national polls.

Investors are also wary of a likely loss of an EU trade concession.

A correction in the index was expected after the market doubled so far this year and became the second best performing market in the world with the benchmark index topping 3,000 points to an all time high.

Sri Lanka's economy was hit by excessive government spending, triggered high inflation, and high interest rates in the midst of a global downturn.

Diversified John Keells Holdings closed down 4.00 rupees at 4.00. Aitken Spence Hotel Holding close flat at 215.00 rupees, Commercial Bank of Ceylon closed at 167.50 up 50 cents.

Commercial Bank appointed a Settlement Bank of CSE's Central Depository System

The Commercial Bank of Ceylon has been appointed a Settlement Bank of the Central Depository System (CDS) of the Colombo Stock Exchange (CSE) following the latter's move towards a multiple bank settlement system.

Consequently, stockbrokers accredited with the CSE will have the option of using the services of Sri Lanka's benchmark private bank for settlements relating to securities traded on the Colombo Stock Exchange.

Welcoming Commercial Bank as the first new bank in the multiple bank settlement system, Mr. Nihal Fonseka, Chairman of the CSE said: "Offering brokers a choice of banks for settlement of transactions is an international best practice that will be welcomed by all those who trade in securities. This is therefore an important milestone in the evolution of the CDS settlement system."

Commercial Bank Managing Director Amitha Gooneratne said: "The Commercial Bank is very pleased to be selected as a service provider to the Central Depository System of the Stock Exchange. Colombo has one of the most dynamic bourses in the region, and we look forward to providing our services to brokers."

A fully owned subsidiary of the Colombo Stock Exchange, the Central Depository System (Pvt) Ltd., acts as the depository for all securities traded on the Exchange and is responsible for the post trade settlement of transactions. It holds securities in trust for holders of securities of quoted companies pending transactions via the Automated Trading System (ATS) and Debt Securities Trading System (DEX) of the CSE.

As a Settlement Bank, Commercial Bank will be responsible for the accepting or transfer of funds relating to trades between the accounts of participants of the CDS.

Settlements under the new multiple bank settlement system will initially take place between Commercial Bank and Sampath Bank, which has been the settlement bank of the CDS for many years.

Settlements through Commercial Bank are scheduled to begin for transactions taking place on 26 October 2009 which are executed by stock brokers who use Commercial Bank as their settlement Bank.

The CSE was one of the first Exchanges in the region to successfully automate its clearing and settlement functions in 1991, with the installation of a Central Depository and an Automated Trading System (ATS) in 1997. This has notably enhanced the transparency and efficiency of the securities market in Sri Lanka.

A total of 232 companies are currently listed on the CSE, representing 20 business sectors with a market capitalization of Rs. 969.6.billion as at 21 October 2009.