April 19, 2010 / 3:08 PM / 9 years ago

Sri Lanka shares at new record on post-poll confidence

COLOMBO, April 19 (Reuters) - Sri Lanka’s shares hit a new record high on Monday as it opened with active trading following the local New Years’ holiday and parliamentary poll results that showed a strong government coming to power. The All-Share Price Index .CSE of the Colombo Stock Exchange touched the 4,000 mark to hit a new all-time high of 4,025.69 points, surpassing its previous high of 3,981.67 on April 12. It closed 1.22 percent firmer at 4,015.36.

Analysts said hopes of a politically stable government after the April 8 polls helped boost local investor sentiment.

“We believe the positive trend will continue until the index hits at lesat 4,200 and then the market will consolidate,” said Hussain Gani, associate director at Asia Securities.

“The price-to-earnings E ratio is around 17 and we expect the market to move up until it reaches 20-22.” President Mahinda Rajapaksa’s ruling party is leading in the polls with 117 seats out of 180 announced so far with re-polls scheduled in two districts on Tuesday.

Political analysts predict Rajapaksa to have a parliamentary majority of at least 143 seats in a 225-member body, just seven short of the 150 he would need to change the constitution.

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

The hotel and travel sector .CSEHT, which rose more than 4 percent to hit a new record high, led the day’s gains with John Keells Hotels JKH.CM adding 8.6 percent and Ceylon Hotels CHOT.CM jumping 21.4 percent.

Foreign investors sold a net 165 million rupees’ worth of shares, data showed. They have sold a net of around 13.3 billion rupees’ ($116.7 million) worth of shares this year.

The bourse is up 18.6 percent so far this year, making Asia’s best performing market.

The market has shot up 170 percent since it hit a four-year low on Dec. 30, 2008, rising from a low base on optimism that the island nation would end a 25-year war. The end of the war last May and an IMF loan in July helped boost investor confidence.

The day’s turnover was 1.76 billion rupees ($15.5 million), more than thrice of 2009 average of 593.6 million rupees.

The rupee currency LKR= rose to 113.90/93 per dollar from Friday's close of 113.97/114.00 due to exporter selling of dollars, currency dealers said.

The interbank lending rate or call money rate CLIBOR, rose to 9.038 percent from Friday’s 9.000 percent.

For secondary market rates, please see <0#LKBMK=>. ($1=113.915 Sri Lankan rupees) (Editing by Bryson Hull)

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