Sri Lanka shares at new high; foreigners exit

COLOMBO, March 1 Mon Mar 1, 2010 5:29pm IST

COLOMBO, March 1 (Reuters) - Sri Lankan share prices hit a new record high on Monday led by retail buying, despite the departure of foreign investors amidst political and economic concerns.

The All-Share Price Index .CSE of the Colombo Stock Exchange gained 0.94 percent to hit a new high of 3843.67 points, surpassing its previous all-time high hit on Feb. 28.

It closed 17.44 points or 0.46 percent up at 3825.30.

"It's retailer-driven and the market will further go up due to retailers," said Jaliya Wijeratne, director of institutional sales at SMB Securities. "Foreigners have been leaving due to problems in their own countries."

Other analysts said the exit of the foreigners was due to Sri Lanka's own political and economic concerns as other emerging markets are still seeing foreign investment inflows.

The International Monetary Fund (IMF) on Thursday announced it is delaying the loan to Sri Lanka after the government missed its 2009 deficit reduction targets. [ID:SGE61O0GP] [ID:nSGE61P0KY]

Foreigners were net sellers for 15 million rupees worth of shares on Monday. They have been net sellers in 30 out of the 37 trading sessions so far this year.

Foreigners, who had been net buyers since 2001, turned net sellers in 2009, selling 785.3 million rupees worth of shares. They have sold a net 5.1 billion worth shares so far this year and 2.54 billion rupees since the Jan. 26 presidential election results were announced.

Sri Lanka will hold legislative elections on April 8, after a presidential poll on Jan. 26, in which president Mahinda Rajapaksa won against his rival, former army commander General Sarath Fonseka, by a 1.8-million-vote margin.

For Sri Lanka's key political risks, see [ID:nRISKLK]

The bourse is still up 13 percent so far this year, following a 125 percent rally in 2009, one of the best in Asia.

The day's turnover was 1 billion rupees ($9 million), more than the 2009 daily average of 593.6 million rupees.

Shares in John Keells Hotels KHL.CM gained 6.7 percent while Asian Hotel Properties AHPL.CM rose 3.9 percent to 126.75 rupees a share, calculated on a weighted average.

The Sri Lankan rupee LKR= closed flat at 114.58/60 per dollar though importer demand for dollars were more than exporter selling, dealers said.

"But a state bank, which usually represents the central bank kept the rupee steady," said a currency dealer.

The interbank lending rate or call money rate CLIBOR, closed flat at 9.123 percent from Friday's 9.125 percent.

For secondary market rates, please see <0#LKBMK=>. ($1=114.59 Sri Lankan rupees) (Editing by Greg Mahlich)

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