S.Lanka shares at 2-wk high led by telco, oil firms


By Shihar Aneez

COLOMBO, July 30 (Reuters) - Sri Lankan shares rose 0.85 percent on Wednesday to a two-week high, led by telecoms and oil firms, as investors remained upbeat following a large overseas deal and overcame a security shutdown in the capital.

The All-Share index closed 20.44 points firmer at 2,429.14, its highest close since July 15.

Dubai-based engineering firm Al-Futtaim on Monday bought a 71 percent stake in Sri Lankan motor vehicle company Associated Motorways at 174.50 rupees each.

"High turnover and foreign interest in the market have boosted investor confidence," said Hussain Ghani, assistant director at Asia Securities.

Traders had expected little market interest this week due to a security clampdown in the main commercial area of Colombo ahead of a regional summit.

But the bourse has risen 2.5 percent in last three sessions with a turnover of more than 8 billion rupees. It hit a near two-year closing low on July 22, and is down 4.4 percent in 2008.

The market has been hit by worries about the civil war and high inflation and interest rates. Investors expect the difficult economic conditions will weaken corporate earnings.

Market heavyweight Dialog Telekom closed 3.7 percent firmer at 14 rupees calculated on a weighted average, while top fixed-line phone operator Sri Lanka Telecom rose 0.56 percent to 45 rupees.

Both telecom shares were traded in thin volumes.

The local unit of Indian Oil Corp , Lanka IOC , closed 5.13 percent firmer at 20.50 rupees a share. Traders said investors expected better profit margins due to declining global oil prices.

Top conglomerate by market capitalisation John Keells Holdings closed unchanged at 100 rupees a share, while shares in Associated Motorways also ended flat at 174.50 rupees.

Market turnover was 228.2 million rupees ($2.1 million), more than half of last year's daily average of 400 million rupees.

The rupee edged up to 107.53/55 a dollar, from Tuesday's close of 107.55/58 on dollar sales by traders.

"The rupee would have risen to the 107 level, but a state bank protected it at 107.50 per dollar," said a currency dealer. The interbank lending rate or call money rate fell to 15.947 percent from Tuesday's 16.913 percent. (Editing by Mark Williams) ($1=107.54 rupees)



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