Sri Lanka shares up, Lanka Cement draws interest

Sri Lanka shares up, Lanka Cement draws interest
Published: 23 July 2009

Sri Lankan shares ended firmer Wednesday, still riding the momentum generated by the government clinching a US$2.5bn International Monetary Fund loan, brokers said.
 
The All Share Price Index rose 0.47 per cent (11.71 points) to end at 2,485.28 while the more liquid Milanka rose 0.89 per cent (24.55 points) to close at 2,773.63, according to provisional stock exchange figures. Turnover was INR658m.
 
Srimal Liyanage, head of research at Lanka Securities, said investors were upbeat over the government clinching a US$2.5bn International Monetary Fund loan.
 
"The IMF loan helps improves the country’s image as it implies that the situation is improving," he said. "It gives confidence to investors."
 
But he said foreign investors had still not started investing in the Colombo bourse in a big way, probably as they were still assessing the country risk.
 
Despite the IMF loan, foreign investors still appeared to lack confidence as there appeared to be concerns about the government’s ability to handle the economy properly, ensuring stable growth.
 
"The positive momentum is still there although can be fluctuations in the share market because of profit taking," said Liyanage.
 
"But the long-term trend would be positive as we have got the IMF loan and most of the negative factors are over. The only doubt would be how the government manages the economy in future.
 
"Investors would be looking at government policies, especially taxation, and also assessing the political situation,"
 
Lanka Cement was the most actively traded stock on speculation about future earnings potential with several foreign cement companies looking to revive its defunct plant in northern Jaffna which sits on a rich limestone deposit.
 
Source: www.lankabusinessonline.com