The Sri Lanka share index hit a fresh all-time high in high volume trade on Friday led by local buying in hotel shares, but foreigners continued to exit the market, despite post-war economic optimism.
The All-Share Price Index of the Colombo Stock Exchange rose 23.82 points to hit a new record high of 3,856.12 points, surpassing its previous all-time high of 3,849.23 hit on Monday.
It closed 0.33 percent or 12.54 points firmer at 3,844.84.
The day’s turnover was 2.87 billion rupees ($25.2 million), five times the 2009 daily average of 593.6 million rupees, due to conglomerate Hayleys buying in 51 percent stake of Hotel Services from mainly foreign investors.
Hayleys and retail buying boosted the market, said Prashan Fernando, chief operating officer at Acuity Stockbrokers.
Hayleys in a statement to the bourse said it had acquired 26.45 percent of Hotel Services stake from Green Care International limited, 16.36 percent from HSBC International Nominees Ltd and 8.19 percent from East West Properties Ltd.
Foreigners sold a net 1.56 billion rupees ($13.7 million) worth of shares on Friday. They have been net sellers in 35 out of the 46 trading sessions so far this year.
Foreigners, who had been net buyers since 2001, turned net sellers in 2009, selling 785.3 million rupees worth of shares.
They have sold a net 7.1 billion rupees worth shares so far this year and 4.6 billion since the Jan. 26 presidential polls.
Analysts say foreigners leave the bourse due to concerns over economic and political stability amid an eight-year high budget deficit in 2009, a delay of the third tranche of a $2.6 billion loan by the International Monetary Fund and political uncertainty ahead of a parliamentary polls on April 8.
However, some analysts say the numbers are distorted due to the gradual exit of a U.S.-based hedge fund after its Sri Lankan-born founder was charged in an insider dealing case.
The bourse is up 13.6 percent so far this year, following a 125 percent rally in 2009, one of the best performers in Asia.
Hotel Services jumped 9.5 percent to 23 rupees, while Hayleys rose 3.2 percent to 236 rupees.
The rupee closed firmer at 113.98/114.00 per dollar, compared with Thursday’s close of 114.03/08 as a state bank protected the rupee at 113.95, currency dealers said.
The rupee hit a one-year high during the early trade on Thursday as a state bank, through which the central bank directs the market, reduced its dollar trading band.
The International Monetary Fund, as a condition for a $2.6 billion loan to Sri Lanka, had asked the central bank to allow necessary flexibility in the exchange rate to build up reserves, which are now around $5.3 billion.
The IMF on Feb. 25 said it would delay a third tranche of the loan amid concerns over high domestic financing until it sees the budget after April 8 parliamentary polls.
The interbank lending rate or call money rate, rose to 9.286 percent from Thursday’s 9.160 percent.