S.Lanka bourse up on IMF loan hopes, cbank buys dlrs

Reuters - Tuesday, June 16Send IM Story Print


* Market sees net foreign outflow of 119.8 million rupees



* High expectations on IMF loan moves market-brokers



* Bourse at new 9-mo high with significant turnover



* Cenbank mops up $267 million from mkt after war



By Shihar Aneez



COLOMBO, June 15 - Sri Lankan shares <.CSE> rose on Monday to a new nine-month high led by foreign buying of bluechips on an expected IMF loan approval and continued local purchases of plantation and hotel shares.



The rupee closed flat as a state bank bought dollars.



The Colombo All-Share Price Index rose 1.4 percent or 31.50 points to 2286.12, its highest close since Sept. 16. "It was a very active market," said Shivantha Meepage, a research analyst at Acuity Stockbrokers. "There is high hope of Sri Lanka getting the IMF loan soon. Foreigners bought bluechips, while retail investors bought plantation and hotel shares."



The central bank on Wednesday said Sri Lanka's request for a $1.9 billion International Monetary Fund loan is expected to be approved by the end of June. [ID:nCOL430797] The IMF has yet to comment.



Analysts say foreign funds have been slow to come to the market, which has been driven higher by retail buyers on positive sentiments since the war ended on May 18.



Net foreign inflows had been 1.4 billion rupees before the end of war, but have turned to a net outflow of 337.8 million rupees on Monday including a 119.8 million rupee outflow. ------------------------------------------------------------



For Q+A on post-war foreign share buying see [ID:nCOL8675] ------------------------------------------------------------ High oil prices, which go along with synthetic rubber prices, and high tea prices pushed up plantation shares, analysts said.



Oil eased to around $71 a barrel on Monday, retreating from a near eight-month high last week. [ID:nLF513583]



Sri Lanka's average total tea price has jumped around 22 percent to 342 rupees in May from January on high global demand.



The bourse has risen around 20 percent since the government declared victory in the 25-year war and is up 52.1 percent so far this year on post-war optimism.



Top conglomerate John Keells Holdings rose 3.23 percent to 120 rupees, calculated on a weighted average, while Sri Lanka Telecom gained 2.38 percent to 43 rupees. Kotagala Plantation rose 15 percent to 32.50 rupees and the plantation sub-sector index <.CSEPL> gained 12 percent.



In the hotel sector, Confifi Hotels closed 9.1 percent firmer at 113.50 rupees.



The turnover was 1.19 billion rupees , more that double last year's daily average of 464 million rupees.



The rupee closed flat at 114.90/95 a dollar as a state bank bought dollars at a flat rate of 114.90 rupees, dealers said.



Nandalal Weerasinghe, chief economist at the central bank, told Reuters the central bank had mopped up $267 million since the end of the war to maintain exchange rate stability.



Currency dealers said exporter conversions, inflows from remittances, foreign buying of government securities, and donor funds for war-displaced people were seen in the market.



The interbank lending rate or call money rate edged down to 10.085 percent from Thursday's 10.134 percent.