Sri Lankan shares gained 0.34 percent on Friday led by local buying with volatility ahead of a presidential poll next week, dealers said. The All-Share Price Index of the Colombo Stock Exchange closed 12.02 points firmer at 3,531.73 points. It hit a record high of 3586.68 on Monday.
"The market was highly volatile on the uncertainty ahead of the election," said an analyst on condition of anonymity. "One day the market rises on investors' hope for rapid economic recovery, betting on the opposition candidate winning. But the next day it falls as they feel the incumbent might win."
Sri Lankan President Mahinda Rajapaksa is facing a stiff challenge from his former army chief, General Sarath Fonseka, who oversaw the defeat of the separatist Tamil Tiger rebels, at the January 26 presidential poll. Analysts expect a close finish.
Analysts said the market shrugged off an explosion hitting the home of a financier of Fonseka on Friday, amid increasing pre-poll violence The day's turnover was 1.68 million rupees ($6.4 million), around thrice of 2009 daily average of 593.6 million rupees. Daily average turnover for 2010 has been 1.67 billion rupees.
Foreign investors have sold a net 1.9 billion rupees worth of shares so far in 2010, after selling a net 785.3 million rupees last year. The rise was led by hotel and travel sector due to 2.44 percent gain in John Keells Hotels to 31.50 rupees after announcing 1 for 3 rights issue at 10 rupees a share on Thursday.
Trading firm C. W. Mackie, which closed 0.72 percent up at 35 rupees, said in a statement to the bourse that Lankem Ceylon and Kotagala plantation had purchased 36.71 percent and 19.85 percent of its stakes respectively from Danish based Aarchus United A/S. Investment firm First Capital leapt 53.66 percent to 63 rupees and analysts said hopes of strong earnings led by high returns for the company's treasury bond investment led investors to buy the share at very high price.
The bourse has risen 4.3 percent so far this year after being one of the world's best-performing markets in 2009, jumping 125.2 percent on post-war optimism.
The Sri Lanka's rupee closed flat at 114.35/40 per dollar as a state bank, through which the central bank directs the market, kept its dollar buying rate unchanged at 114.35, dealers said. "There was demand for the rupee as exporters converted dollars ahead of the election," a dealer said. The interbank lending rate or call money rate edged up to 9.088 percent from Thursday's 9.040 percent.
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