Sri Lankan shares hit a new record high on Friday, bolstered by foreign investors buying into the market on hopes of strong profits and post-war growth. The Colombo Stock Exchange's All-Share Price Index hit a new all-time high of 4,903.27, surpassing its previous peak of 4878.73 hit on Thursday. It closed 46.34 points or 0.96 percent firmer at 4,895.51. It has risen 4.7 percent this week.
The market is Asia's best performer with a 44.6 percent return so far this year. Investors have been aggressively on the buying side since the central bank cut policy rates by 25 basis points on July 9. Since then the market has risen 8.65 percent. Post-war economic growth and strong earning hopes have been driving the bourse, analysts said. Since the end of the war in May 2009, the bourse index has risen 156.6 percent.
Analysts say the surge was driven by retail investors due to low interest rates, while institutional and foreign investors are cautiously buying while waiting for a correction. Shares in Cargills Ceylon rose 3.92 percent to 132.25 rupees a share while conglomerate John Keells Holdings rose 0.77 percent to 230 rupees.
Turnover on Friday was 4 billion rupees ($35.3 million), more than six times of last year's daily average. Foreign investors bought a net 263.5 million rupees worth of shares, but they have sold a net 14 billion rupees so far this year.
The rupee edged down to 112.79/81 a dollar from Thursday's close of 112.77/80 due to importer dollar demand. Currency dealers said the central bank reduced dollar trading band by 10 cents to 112.65/113.05.
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