Bourse hits new record on palm oil shares

Saturday, 12 February 2011 00:24 - - {{hitsCtrl.values.hits}}

* Bourse at new all-time high again after Dialog results

* Foreign investors continue to exit on valuation concerns

* Rupee down on cenbank move moving dlr trading band

COLOMBO (Reuters) - Sri Lanka’s stock market hit a new record high on Friday as institutional and high net worth investors bought large-cap oil palm shares on hopes of strong earnings in a booming global commodity market.

Oil palms sector index hit a record high with conglomerates Bukit Darah <BUKI.CM> and Carsons Cumberbatch <CARS.CM> gaining 27.5 percent and 4 percent on hopes of better prices for oil palms in the world.

Both firms produce palm oil in Malaysia and sell globally.

The island’s main share index <.CSE> hit an all-time intraday high of 7,656.90 before closing 1.24 percent or 93.01 points firmer at a new closing high of 7,586.63.

Foreign investors sold a net 96.5 million rupees’ worth of shares on Friday, extending the total net foreign outflow to 4.8 billion rupees so far in 2011, after selling a record net 26.4 billion in 2010.

The bourse has been Asia’s best performer with a 14.3 percent gain in 2011 after being the top performer last year with a 96 percent return. Heavy retail buying has pushed it deeper into the overbought region with 14-day relative strength index at 86.3.

Turnover was 3.8 billion rupees ($34.2 million), more than this year’s daily average 3.9 billion rupees and the last year’s 2.4 billion rupees.

Traded share volume was 96.3 million, against a five-day average of 113.6 million. The 30-day and 90-day average trading volumes were 100.9 million and 70.5 million respectively. Last year’s daily average volume was 69.2 million.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.2, one of the highest among emerging markets, compared with 12.8 in Asian markets and 11.7 in global emerging markets, Thomson Reuters StarMine data showed.

The rupee <LKR=> closed weaker at 111.03/06 a dollar from Thursday’s 110.98/111.00 as the central bank moved down the dollar trading band to 110.50/111.10 from 110.40/111.00 amid heavy importer dollar demand and stock-related outflows, dealers said.