COLOMBO, Dec 28 (Reuters) – Sri Lankan shares .CSE hit a fresh record high on Monday led by strong retail buying, on expectations of better profits due to post-war economic optimism amid low interest rates ahead of a January election.
The All-Share Price Index .CSE of the Colombo Stock Exchange jumped 1.75 percent or 57.74 points to a fresh record high of 3,350.50, surpassing its previous high of 3,340.56 points hit on Wednesday.
The bourse closed 1.58 percent, or 52.13 points, firmer at 3344.89. It has risen 122.5 percent so far this year.
Analysts said investors were positioning ahead of Jan. 26 presidential polls, betting the stock market will continue its climb regardless of the election outcome.
Foreign investors have sold a net 576.3 million rupees worth of stocks so far this year, bourse data showed, compared to a record net foreign inflow of 13.9 billion rupees in 2008.
But analysts said the number largely reflected the exit of Galleon Hedge Fund after its founder Raj Rajaratnam was charged with insider trading by U.S. authorities and that foreigners were net buyers in recent weeks.
“Low interest rates and expectations on better profits due to post-war economic optimism have been the main reasons for heavy buying,” Hussain Gani, associate director at Asia Securities, said.
Diversified conglomerate Aitken Spence SPEN.CM jumped 12.62 percent to 1,350 rupees, while top mobile phone operator Dialog Telekom DIAL.CM rose 3.57 percent to 7.25 rupees.
The day’s turnover was 563 million rupees ($4.9 million), driven by local retail buying and more than last year’s daily market average of 464 million rupees.
Sri lanka’s presidential poll is scheduled for Jan. 26 and will be followed by parliamentary election due by April.
Analysts and traders said the broader market is still waiting for direction from the economic policies of the main presidential candidates Mahinda Rajapaksa and Sarath Fonseka.
For Sri Lanka’s political risks, see [ID:nSGE5BE023]
The Sri Lankan rupee
LKR= narrowly firmed to 114.42/45 per dollar, compared with Thursday’s close of 114.42/48.
Both share and money markets were closed on Friday for Christmas.
The interbank lending rate or call money rate CLIBOR edged down to 9.079 percent from Thursday’s 9.092 percent.
For secondary market rates, please see <0#LKBMK=>. ($1=114.435 Sri Lankan rupees) (Editing by Harish Nambiar)
Off the floor Broker Talk 
Markets, News 
29 December 2009 
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