Shares at 3-mo high on retail buying

•  Bourse gains to highest level since 5 Oct.
• Retailers move the market by buying illiquid shares
• Rupee edges up on high importer dollar demand.

The Colombo stock market edged up on Tuesday to a more than three-month high on retail buying of illiquid shares, while the rupee edged down on heavy importer dollar demand.

The benchmark ASPI closed 0.72% or 50.27 points weaker at 7,058.33. It has been Asia’s best performer with a 6.4% gain so far in 2011 after being the top performer last year with a 96% return.

Reuters quoted analysts as saying retail buyers bought illiquid shares like Colombo Fort Land, which jumped 27.5%, accounting for a significant part of the overall market’s gain.

Turnover was Rs. 3.5 billion, more than last year’s daily average of Rs. 2.4 billion. Foreign investors were net buyers of a net Rs. 44.5 million worth shares on Tuesday, but they have sold a net Rs. 1.6 billion so far this year after selling a net Rs. 26.4 billion in 2010.

NDB Stockbrokers said healthcare sector gained, triggered by a negotiated deal of Asiri Hospitals as well as on renewed interest in certain counters in the sector. Indices improved amidst accumulation across the board. Singer Finance too continued to attract retail investors.

Bank, Finance & Insurance and Healthcare sectors were the highest contributors to the market turnover while indices increased by 0.04% and 6.06% respectively.

Singer Finance made the highest contribution to the market turnover. The share price increased by Rs 1.40 (2.85%) and closed at Rs 51.40.

Asiri Hospitals also contributed to the market turnover with a crossing of 41,769,190 shares at Rs 9. The share price increased by Rs 0.20 (2.27%) and closed at Rs 9.

Lankem Ceylon announced an interim dividend of Rs 1.00 per share.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.7, highest among emerging markets, compared with 13.0 in Asian markets and 12.1 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 81.5, beyond the overbought limit of 65.4.

The traded share volume was 190.5 million against five-day and 30-day average of 102.6 million and 65 million respectively. The 90-day average volume is 68.3 million. Last year’s daily average volume was 69.2 million.

Sri Lanka’s rupee edged down to 110.85/88 a dollar from Monday’s 110.78/80 on importer dollar demand, traders said.